Coalition Formation under Uncertainty: the Case of First-mover Disadvantage (Preliminary Version)

Let time be continuous and indexed by t ≥ 0. Consider a horizontally differentiated oligopoly with three firms named 1, 2 and 3. Each firm is described by its brand demand function and for simplicity there are no costs of production. The firm i ∈ {1, 2, 3} produces one brand and charges at time t the unit price pit for the good of the own ∗Corresponding author. E-mail address: [email protected]; Tel: +32 3 220 40 51; Fax: +32 3 220 45 85.