(a) First Mover Advantage/Second Mover Advantage

Under the context of Oligopoly, the First mover advantage refers to the payoff the first mover receives which is higher as compared to the payoffs when moved simultaneously in the market. Thefirst Mover has the advantage to set the game strategy of the market while the other players entering the market later follow the guidelines of the first-mover. In addition, the first mover has the advantage to shape the market forces according to him and set trend in the market. Itoffers competitive advantage to the fist mover for being the pioneer in the market.

The second mover refers to the players who enters the market after the first mover has set the ground for particular offerings. The second mover has an advantage over thefirst mover because he has adequateknowledge of the market and know the depth of the sea and thus frame his entering strategy smartly. The second mover has the advantage to learn from the mistakes of the first mover and design an offering which cover those mistakes and area, thus offering a better product/service and harvesting high payoffs.In addition, the second mover has the advantage to target the customers and accumulatethe offerings which are the mix of the offerings of the first player with the addition of more features that matches the demand of the market, thus offering a better product/service.

Economics Game Theory Harvard Case Solution & Analysis

The competitive advantage and payoffs related to the First mover and second mover varies from industry to industry. In an ideal situation, the first mover advantage is better because it enables the player to set the game ofthe market according to his will, he has an advantage to set the trend that best suits him, and set the competition level, while the other movers have to follow the market trend set by the first mover. But the first mover advantage doesnot always work in all industries. For example, in field of technology and innovation, the second mover hasmore advantage over the first, because till the time he acquires the technology, thecost of acquiring reduces and the replication is easy, which offers a competitive edge to the second mover to develop an offering at low cost, thus gaining more in the market than the firstplayer. Lastly, the second Mover may not set the trend but can offer a better version of the same product at low cost because he has data and knowledge of the consumer behavior which the FirstMover did not have.

The players in market can achieve FirstMover advantage by implementing disruptive strategy or offering a unique product. ForexampleApple, Apple created a phone when there was no need of such phone and thuscreated the demand for such a phone. The second mover advantage can be achieved by employing the alternativemethod of producing a product which reduces the cost and thus enables the second mover to set cost-leadership strategy which offer a higher payoff. The pre-emptive move is credible in most of the cases but again it depends on the nature of the industry the player is trying to enter.............

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