What determines whether it is more advantageous to be the first mover or the second mover?
A)whether profit or growth is more important to the player
B)whether the other player is bigger or smaller than the player making the first decision
C)whether the unique equilibrium benefits everyone
D)whether commitment or flexibility is more important in the situation

Question

Quizplus · Accepted Answer

The advantage of being a first mover is that the player can establish a competitive advantage, set prices, and gain market share. However, being a first mover also involves the risk of making a wrong decision, facing high initial costs, and not being able to adapt to changing market conditions. In contrast, being a second mover allows the player to learn from the mistakes of the first mover, avoid initial costs, and adapt the strategy to the market conditions. However, being a second mover also involves the risk of being locked-in and facing more intense competition. The choice between being a first mover or a second mover depends on the specific situation and the player's preferences for commitment or flexibility. Therefore, the best choice is D, whether commitment or flexibility is more important in the situation.

What Determines Whether It Is More Advantageous to Be the First