Reputation and the Scope of Entry

How an incumbent treats a pioneer can shape not only whether a later rival enters, but how broadly it enters.

We study an incumbent with privately known response capability, a pioneer whose treatment may become public, and a later challenger that chooses an entry portfolio.

Unlike additive multiple-opponent reputation models, responses draw on a shared convex resource: broader entry dilutes defense in each market even as total defense rises, so portfolio scale does not cancel from reputational incentives.

We show that greater visibility induces more imitation by a low-capability incumbent, making a verified fight less diagnostic of high capability and, conditional on that record, moving the challenger to a weakly larger portfolio.

The adjustment need not be gradual.

Because only points on the upper concave hull of portfolio payoffs are ever chosen, an intermediate scale can leave that hull as credibility falls, and positive probability mass then jumps directly to a broader rollout---an entry wave.

We characterize the mechanism for any number of markets and identify primitive conditions under which it operates, together with the two boundaries---one market or additive defense---at which the portfolio channel disappears.