REAL OPTIONS AND FOLLOWER STRATEGIES: THE LOSS OF REAL OPTION VALUE TO FIRST-MOVER ADVANTAGE

摘要

The value in real options comes from the firm's ability to wait until conditions are optimal before moving forward with a project. There may be a loss of this optimal value if decision-makers anticipate preemptive entry by a competitor. Pioneers that enter markets early might ignore or spoil the real option value from delay. Although market pioneers may gain first-mover advantages, followers have important advantages as well. In this paper we discuss these follower advantages, providing examples of successful delay in the context of a real option on innovation.