Besanko, David; Doraszelski, Ulrich; Lu, Lauren Xiaoyuan; … - C.E.P.R. Discussion Papers - 2008
capacity and lumpy investment/disinvestment. We use our model to answer two questions. First, what economic factors facilitate … investment sunkness, and high depreciation promote preemption races. We also show that low product differentiation and low … investment sunkness promote capacity coordination. Although depreciation removes capacity, it may impede capacity coordination …