If first movers
anticipate that second movers are more likely to complete trades where the price favors the second mover, then first movers
find themselves in a situation similar to a first price auction; one could ask for a larger but less likely payoff or one that is smaller and more likely.
7) Figures in the middle column reveal little difference among average amounts sent by first movers
in all four implementations of the investment game.
Second movers should return exactly what was sent (Y/X = 1), and first movers
should anticipate this (E[Y/X] = i).
Customers, suppliers and competitors that are pursuing first-mover advantages will seek out other first movers
with whom to partner.
If the large party is placed either second or fourth in the order, condition 3 is satisfied, and the rest of the argument above leading to proportional sharing among the first movers
A similar but not identical timing advantage denied to first movers
but available to followers is lower research and development costs.
Figure 1a presents the time series of the average transfers to different income groups from Type A (rich) first movers
from rounds 1 to 10 in the investment game.
The self-regarding preferences model predicts that second movers will keep all of the tripled amounts sent, and knowing this, first movers
will send nothing.
This behavior is an indication either that first movers
want to give more money to attractive counterparts (taste-based discrimination) or that they expect attractive persons to reject lower offers (which is not taste based but rather based on expectations or, in a way, productivity).