first mover advantage
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2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yan Liu ◽  
Heng Xu

Purpose This paper aims to investigate the motivation for firms to innovate their products to be socially responsible in the presence of the spillover effect. The follower of the innovation in corporate social responsibility (CSR) can benefit from the leader’s innovation by technological spillover. For instance, evidence can be found in the cosmetics industry (e.g. Lush Retail Ltd. and The Body Shop) and the market of hybrid electric vehicles (e.g. Toyota and Honda). Moreover, consumers may have different perceptions on the sequence of CSR innovation by firms, they may prefer more on the CSR product launched by the leader because they usually relate the desired stage to their interests when making a purchase decision. Therefore, the firms’ decision to be a leader of the CSR innovation depends on the trade-off between the loss in the spillover effect and the benefit of the first-mover advantage, which has not been considered by the existing literature. This paper explains the firms’ motivation on CSR innovation in a realistic situation where competing firms’ CSR programs are launched sequentially and sheds light on the private sector’s decision on strategy from the perspective on the social contribution, and provides some managerial implications about the competing firms’ strategies of launching the CSR innovation. Design/methodology/approach The authors construct a two-period Hotelling model in which consumers are divided into two groups: the altruistic and normal consumers. The altruistic consumers have more willingness to pay for the CSR product while the normal consumers only care about the product performance improved by the firms’ CSR activities. Firms have the option to innovate their basic products to be socially responsible and make their decision on such CSR innovation sequentially. Moreover, the follower of the innovation can receive a spillover effect from the leader, meaning that there may exist a second-mover advantage in terms of innovation (the authors define this as a spillover effect), but in the meanwhile, the altruistic consumers value more on the CSR product sold by the leader than that by the follower (the authors define this as a preference-reduction effect). This implies that the firm can benefit in the production process from being a second-mover of the CSR innovation but may lose its first-mover advantage in terms of the preference-reduction effect. By finding and analyzing the sub-game perfect Nash equilibrium, the authors try to figure out the firms’ decisions on CSR innovation in various situations. Findings The authors find that the firms’ motivation of CSR innovation crucially depends on the fraction of the altruistic consumers, as well as the spillover effect and the preference-reduction effect. A large (small) fraction of the altruistic consumers attracts (restricts) both the leader and the follower to engage in CSR innovation. More importantly, when such fraction is not too large but stays at a relatively high level, a potential leader of the CSR innovation may not wish to innovate. Hence, the potential follower may be the monopolist in the market of the socially responsible product. In addition, the authors reexamine this result in a variation model where a leader can make its decision on the CSR innovation to be more flexible by allowing it can innovate in either periods 1 or 2. The authors demonstrate that when the fraction of the altruistic consumers falls in an intermediate range, the leader may wish to delay the CSR innovation to period 2. In such a case, the leader of the CSR innovation may tend to trade its first-mover advantage for head-to-head competition with the follower and prevents the follower from benefiting from the spillover effect. Moreover, a flexible choice on the CSR innovation brings greater initiative to a firm to be the leader of the innovation. Originality/value Nearly all the studies about firms’ decisions on CSR innovation are conducted in an environment of simultaneous move, which is not appropriate to describe the real business world; many pieces of evidence show that many CSR programs are launched sequentially rather than simultaneously. The theory identifies a couple of important factors of the CSR innovation in a more realistic situation, i.e. sequential more on CSR innovation. Both spillover effect and preference-reduction effect crucially affect the firms’ decision on innovating their products to be socially responsible, which contributes to the existing literature in CSR and strategic decision. This paper also sheds some light on managerial implications with CSR innovation under various situations of competition.


2021 ◽  
Author(s):  
◽  
Matthew Nolan

<p>This thesis explores a strategic investment motive for the choice of skilled labour (management). Using the case study of department store competition, we argue that management is an observable and irreversible input. This allows firms to use it to obtain a first-mover advantage in oligopolistic interactions. We find that, given complementarities of labour inputs, firms will hire excess management relative to the cost-minimising input bundle. This idea is first illustrated with a simple two-stage example. We then show that over-management also holds in a more realistic setting with  infinitely-lived firms facing finite adjustment costs.</p>


2021 ◽  
Author(s):  
◽  
Matthew Nolan

<p>This thesis explores a strategic investment motive for the choice of skilled labour (management). Using the case study of department store competition, we argue that management is an observable and irreversible input. This allows firms to use it to obtain a first-mover advantage in oligopolistic interactions. We find that, given complementarities of labour inputs, firms will hire excess management relative to the cost-minimising input bundle. This idea is first illustrated with a simple two-stage example. We then show that over-management also holds in a more realistic setting with  infinitely-lived firms facing finite adjustment costs.</p>


2021 ◽  
Author(s):  
Hyunsik Kong ◽  
Samuel Martin-Gutierrez ◽  
Fariba Karimi

Abstract Mounting evidence suggests that publications and citations of scholars in the STEM fields (Science, Technology, Engineering and Mathematics) suffer from gender biases. In this paper, we study the physics community, a core STEM field in which women are still largely under-represented and where these gender disparities persist. To reveal such inequalities, we compare the citations received by papers led by men and women that cover the same topics in a comparable way. To do that, we devise a robust statistical measure of similarity between publications that enables us to detect pairs of similar papers. Our findings indicate that although papers written by women tend to have lower visibility in the citation network, pairs of similar papers written by men and women receive comparable attention when corrected for the time of publication. These analyses suggest that gender disparity is closely related to the first-mover and cumulative advantage that men have in physics and is not an intentional act of discrimination towards women.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christopher Curtis Winchester ◽  
Erin Pleggenkuhle-Miles ◽  
Andrea Erin Bass

Theoretical basis The theoretical basis for this case is a focus on vertical integration, first-mover advantage and competitive dynamics. Vertical integration is based on Williamson’s (1979) theory of transaction-cost economics as it relates to vertical integration; the discussion on first-mover advantage is built off of Suarez and Lanzolla’s (2005) dynamics of first-mover advantage; and the analyzes on competitive dynamics derives from the MacMillan et al. (1985) early empirical tests of interfirm rivalry dynamics. Research methodology The authors conducted extensive research using the following sources: IBISWorld, MergentOnline and academic journals, trade magazines and websites. Additionally, the authors successfully piloted the case on more than 350 undergraduate students enrolled in a business and corporate strategy course. Case overview/synopsis Peloton used vertical integration to control the creation of its own software, bikes, exercise classes and retail outlets. In doing so, Peloton was one of the first companies in the industry to have near full control of the production process (Gross and Caisman, 2019). Due to this integration, Peloton was one of the fitness equipment industry leaders. However, Peloton’s high level of vertical integration coupled with rapid growth led to lackluster profitability. Given the rise in popularity of in-home exercise equipment, Peloton had room to continue its growth, but the question remained whether it was strategically positioned to do so. Complexity academic level This case is best taught in undergraduate and graduate strategy courses. For undergraduate courses, it could be incorporated into lessons on competitive dynamics, internal analysis and first-mover advantage and strategic positioning. For graduate courses, it could be incorporated into lessons on vertical integration and delving more in-depth into the long-term sustainability of having a first-mover advantage.


2021 ◽  
pp. 152700252110271
Author(s):  
Christoph Bühren ◽  
Lisa Träger

Our field experiment analyzes the influence of psychological traits on performance in sequential games. It uses handball penalties thrown under individual, team, or tournament incentives in the ABBA sequence. Considering the single moves of these games, player A and player B are taking turns in being the first-mover. We find no significant first-mover advantage. However, we observe that player A performs better than player B under tournament incentives and if he or she is confident enough.


Significance Real GDP growth is on track to be at least 6% in 2020, following a 7% contraction last year. Most sectors have bounced back, though not tourism. High levels of vaccination against COVID-19 give the country an advantage few African states can match. Impacts Morocco is seeking first-mover advantage in large-scale vaccine production, but faces competition from South Africa and Egypt. Rabat is also looking to attract investment in other future-focused sectors, including electric vehicles and medicinal cannabis. The sharp increase in nominal GDP will stabilise, or even reduce, Morocco’s debt ratios, which have risen during the pandemic.


2021 ◽  
Author(s):  
Zhuojun Lei ◽  
Lingyun Huang ◽  
Yao Cai

Abstract Existing researches verify Porter hypothesis mainly through one of its core establishment paths, innovation compensation, but ignore the other one, first-mover advantage. To further clarify the mechanism of Porter hypothesis, this paper considers both paths and further distinguishes between environmental R&D and non-environmental R&D. Based on the principle of the smooth transition of "charge to tax" in China, this paper, taking Chinese A-share listed companies that have disclosed environmental R&D from 2008 to 2017 as sample and predicting environmental tax by pollution charge, analyses the relationship between environmental tax and firm performance and the transmission mechanism between them. Our results show that environmental tax can improve firm performance and this influence remains in long term. After introducing instrument variable (IV) to deal with endogeneity and conducting a series of robustness tests, we find that the relationship between environmental tax and firm performance is robust causality. Furthermore, using mediating effect model to analyse the transmission mechanism, we prove that environmental tax can affect firm performance through innovation compensation and first-mover advantage, which confirms the two core paths of Porter hypothesis. This study reveals the micro mechanism of environmental tax on firm performance, provides evidence from China to support strong Porter hypothesis, and helps guide environmental tax reform and corporate green strategy management.


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