The impact of investments on decision-making asymmetry in oligopolistic information markets

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.