Question

Larry's Lizards and Ronaldo's Reptiles are competing for pet store franchises. Both are considering opening a store in the small town of Turtleville. If Ronaldo's opens a profitable store in Turtleville and Larry's management determines that it is not profitable to also open a store, then:

a. this is a simultaneous game.
b. a Nash equilibrium is not possible in this game.
c. Ronaldo's had a first-mover advantage in this game.
d. this is a zero-sum game.

Answer 1

Answer: C. Ronaldo's had a first-mover advantage in this game

Explanation: First mover advantage is a marketing strategy, this advantage is gain by company for being the first occupant of a market or new business segment. This advantage may be made possible by leadership in technology, capital or resource purchase.

In this scenario Ronaldo's Reptiles had the advantage of first mover in Turtleville.