A game theoretic analysis of firms' entry mode decisions Online publication date: Sun, 01-May-2016
by Sang Hoo Bae; Arpita Joardar; Joseph Sarkis
International Journal of Operational Research (IJOR), Vol. 26, No. 2, 2016
Abstract: Limited research has been completed using formal modelling to investigate a firm's entry mode decisions. Addressing this issue, we formulate Dunning's eclectic model as a game theoretic problem. We develop a novel three-stage game theory model to investigate the relationships and nuances of the core constructs of the eclectic model, i.e., ownership advantage, location advantage and internalisation (OLI). We develop an equilibrium solution to identify the optimal entry decisions for firms entering new markets using a two firm-two country scenario when parameters including ownership advantage of firms, market size, production cost and country risks are varied. The results obtained provide insight for future research as well as having significant practical implications.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Operational Research (IJOR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com