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When a start-up competes against an established firm, we find that when demand uncertainty is high and costs do not decline too severely over time, the start-up takes a leadership role and invests first in capacity, whereas the established firm follows; by contrast, when two established firms compete in an otherwise identical game, both firms invest late. We conclude that the threat of firm failure significantly impacts the dynamics of competition involving start-ups. <\/jats:p> This paper was accepted by Yossi Aviv, operations management. <\/jats:p>","DOI":"10.1287\/mnsc.1110.1309","type":"journal-article","created":{"date-parts":[[2011,4,12]],"date-time":"2011-04-12T16:18:36Z","timestamp":1302625116000},"page":"763-777","source":"Crossref","is-referenced-by-count":120,"title":["Capacity Investment Timing by Start-ups and Established Firms in New Markets"],"prefix":"10.1287","volume":"57","author":[{"given":"Robert","family":"Swinney","sequence":"first","affiliation":[{"name":"Graduate School of Business, Stanford University, Stanford, California 94305"}]},{"given":"G\u00e9rard P.","family":"Cachon","sequence":"additional","affiliation":[{"name":"The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104"}]},{"given":"Serguei","family":"Netessine","sequence":"additional","affiliation":[{"name":"INSEAD, 77305 Fontainebleau, France"}]}],"member":"109","reference":[{"key":"B1","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1060.0655"},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1080.0940"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.48.9.1161.176"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.1287\/msom.1090.0284"},{"key":"B5","doi-asserted-by":"publisher","DOI":"10.1287\/msom.1060.0122"},{"key":"B6","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1070.0737"},{"key":"B7","doi-asserted-by":"crossref","unstructured":"Bhaskaran S., Ramachandran K. 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