Subject. The article addresses competition in oligopolistic markets that can be defined as a process of mutual influence of companies, taking into account different levels of awareness and principles of response. It substantiates the expediency of introducing new strategic variables in the form of the volume of promotion activity. Promotion activity is directly related to investments. Objectives. The purpose of the study is to explore the advantages of a market leader that relate both to the network effect available in the information markets and the ability to ignore, to a certain extent, changes in competitors’ actions. Methods. The study employs systems approach as a general methodological principle for solving interrelated modeling problems. Results. Using the duopolistic market case, I analyzed possible aspects of the competitive strategy of a non–leader company in terms of market share as to opportunities to achieve market parity through appropriate investments. The paper shows that consideration of the existing asymmetry in decision-making and desire of a follower company to change market roles may conflict with the conditions for maintaining financial performance, if the efficiency of investments in promotion capacity is not high enough. Conclusions. If return on investment does not provide the necessary level of promotion effectiveness, such a business strategy as a whole is not beneficial for the follower company.
Keywords: oligopolistic competition, information market, Cournot oligopoly, Stackelberg oligopoly
References:
Rozanova N.M. [Competitive Interactions in the IT Industry: World Practice and Russia]. Voprosy Ekonomiki, 2009, 10, pp. 91–106. (In Russ.) DOI: 10.32609/0042-8736-2009-10-91-106 EDN: KYKEAV
Samoilova I.A. [Specificity of the market of information and legal support as a prospective object of mathematical modeling]. Problemy ekonomiki i yuridicheskoi praktiki = Economic Problems and Legal Practice, 2020, vol. 16, no. 6, pp. 127–131. (In Russ.) EDN: ZUKWEG
Samoilova I.A. [Mathematical model of active sales in the competitive market of services]. Nauka i biznes: puti razvitiya = Science and Business: Ways of Development, 2019, no. 12, pp. 307–312. (In Russ.) EDN: DKEFFT
Seliverstov D.A. [Strategic entry deterrence modeling: Literature review]. Vestnik MGIMO-Universiteta = MGIMO Review of International Relations, 2017, no. 5, pp. 209–232. (In Russ.) DOI: 10.24833/2071-8160-2017-5-56-209-232 EDN: ZTWOYZ
Fudenberg D., Tirole J. The Fat-Cat Effect, the Puppy-Dog Ploy and the Lean and Hungry Look. The American Economic Review, 1984, vol. 74, iss. 2, pp. 361–368.
Fudenberg D., Tirole J. Pricing a Network Good to Deter Entry. The Journal of Industrial Economics, 2000, vol. 48, iss. 4, pp. 373–390. DOI: 10.1111/1467-6451.00129
Dement'ev V.E. Strategiya operezheniya v usloviyakh oligopol'noi konkurentsii na rynkakh novoi produktsii. V kn.: Teoriya i praktika institutsional'nykh preobrazovanii v Rossii [Lead strategy in conditions of oligopoly competition in the markets of new products. In: Theory and practice of institutional transformations in Russia. Moscow, CEMI RAS Publ., 2008, pp. 5–10.
