We model capacity-building investments in a homogeneous product duopoly facing uncertain demand growth. Capacity building is achieved through the addition of production units that are durable and lumpy and whose cost is irreversible. While building their capacity over time, firms compete à la...

We study the interactions between the capital structure and the technological flexibility choices of firms in a duopoly. When there are bankruptcy costs, a leveraged firm may modify its strategic choices in order to decrease its probability of bankruptcy. We show that, when the capacity level of...

We show that whether observing technological choices made by competitors is possible or not has significant impacts on the equilibrium technological configurations. Depending upon the industry characteristics, the strategic value of technological flexibility may be either positive or negative,...

There is a large literature on the optimal order of exploitation of natural resources. We explore the impact of specific technical progress that enables the saving of resource inputs in production on the order of exploitation. Models of growth tend to assume uniform and global technical progess....

We study the optimal policies of research and development in the context of a resource-exploiting economy. We distinguish two cases: non-renewable resources and renewable resources. In the first case, we show that it is useful to construct an index of scarcity, which is the product of the level...

The problem in which some agents joint together to realize a set of projects and must decide how to share its cost may be seen as a cooperative cost game. In many instances, total cost may naturally be decomposed into joint costs and costs that are specific to individual agents. We show that the...

We study the links between observability and flexible technological choices in a duopolistic market. We show that, in large markets, the strategic value of flexibility is positive and observability of technological choices promotes the adoption of more flexible technologies whereas in small...

We show that, under asymmetric information about costs, limit location strategies, that is distortions in pre-entry locations created by the entrant's inference about the incumbent's cost advantage which prevent entry, emerge not only as the result of the incumbent's cost advantage but also as...

We investigate the behavior of a polluting monopolist whose production causes a global damage affecting consumers and non-consumers alike while consumption causes a specific damage affecting consumers only. The monopolist anticipates strategically how her decisions on product variant, price and...

This paper deals with the underlying factors explaining the stylized fact that Japan invests significantly more in flexible manufacturing technologies than the United States and Europe. We show how technological flexibility choices and equilibrium (both simultaneous and sequential)...