Decision time and steps of reasoning in a competitive market entry game

Lindner, Florian (2013): Decision time and steps of reasoning in a competitive market entry game. In: Economics Letters, Vol. 122, No. 1: pp. 7-11

Abstract

Entry decisions in market entry games usually depend on the belief about how many others are entering the market, the belief about the own rank in a real effort task, and subjects’ risk preferences. In this paper I am able to replicate these basic results and examine two further dimensions: (i) the level of strategic sophistication, which has a positive impact on entry decisions, and (ii) the impact of time pressure, which has a (partly) negative influence on entry rates. Furthermore, when ranks are determined using a real effort task, differences in entry rates are explainable by higher competitiveness of males. Additionally, I show that individual characteristics are more important for the entry decision in more competitive environments.

• Item Type: Journal article
• Faculties: Economics; Economics > Chairs > Chair of Empirical Economics
• Subjects: 300 Social sciences > 330 Economics
• Language: English