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First-mover advantages from pioneering new markets: A survey of empirical evidence

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Abstract

Market pioneers can develop first-mover advantages that span decades. The most general first-mover advantage that helps explain higher pioneer market share levels is a broad product line or brand proliferation. In markets for experience goods, pioneers tend to shape consumer tastes and preferences in favor of the pioneering brand. While the preliminary results vary by industry, they indicate that market pioneers donot tend to perish more often than later entrants. Accounting profits for market pioneers generally are lower in the first four years of operation, but higher thereafter. Overall, market pioneers follow innovative strategies that have high initial costs and risks, but yield high potential returns.

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Author information

Authors and Affiliations

  1. School of Business Administration, University of Michigan, 48109, Ann Arbor, MI, U.S.A.

    William T. Robinson

  2. School of Management, University of Texas at Dallas, 2601 North Floyd, 75083, Richardson, TX, U.S.A.

    Gurumurthy Kalyanaram

  3. Sloan School of Management, MIT, 50 Memorial Drive, 02139, Cambridge, MA, U.S.A.

    Glen L. Urban

Authors
  1. William T. Robinson
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  2. Gurumurthy Kalyanaram
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  3. Glen L. Urban
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Robinson, W.T., Kalyanaram, G. & Urban, G.L. First-mover advantages from pioneering new markets: A survey of empirical evidence. Rev Ind Organ 9, 1–23 (1994). https://doi.org/10.1007/BF01024216

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