Payoffs with J > 2 Firms Sample Clauses

Payoffs with J > 2 Firms. In the game with J > 2 challengers, let the equilibrium profits of the jth player from sales of its product be given by ΠN# (see Figure A-6). We model these similarly to those in the triopoly where the first two players earn profits equal to that of the brand and the first generic in a triopoly, and all the later entrants equally share profits associated with the third player in a triopoly (an alternative is to set the profits of later entrants to zero which did not change our results in any significant way). Thus, for instance, in the post patent period with no AGs, the profits would be given by (ΠT0, ΠT0, ΠT0/(J − 1), . . . , ΠT0/(J − 1)) and hence the final payoffs are accounted using the values ΠT# depending on the entry order. Then the Γj subgame would be as shown in the figure below. Figure A-6. Game Tree (Γj) with J > 2 players Note that if B looses to the j-th challenger (j > 1), then the choice to launch AG or not in the Γj,G is the same as before. Further, if AG is launched, the first mover advantage does not go to the winning challenger. The latter earns ΠT1 in the current period and δΠT0/(J − 1) in period 2, while if the AG is not launched, it earns a duopoly profit in the current period and grabs the first mover advantage earning ΠD0 and δΠT0 in the first and second periods respectively. 1 1 −