In a recent paper, Alipranti et al. (2014, Price vs. quantity competition in a vertically related market, Economics Letters, 124: 122-126) show that in a vertically related market Cournot competition yields higher social welfare compared to Bertrand competition if the upstream firm subsidises...

We study in this paper how technological flexibility choices and equilibrium configurations depend on industry characteristics (demand function and cost parameters specific to the multiproduct flexible technology and to the product dedicated technologies) and on the observability conditions of...

This paper shows the possibility of higher welfare under Cournot competition in an asymmetric cost duopoly when the firms have the option for technology licensing. We find that if there is licensing with up-front fixed-fee, welfare is higher under Cournot competition compared to Bertrand...

The theoretical literature on industrial organization has been argued that firms hold excess capacity to deter entry. However, empirical analysis did not provide much support to this hypothesis. In this paper we show that the dominant firms may hold excess capacity not for entry deterrence but...

We study the development of a duopoly industry - evolution of firm capacities and competitive behavior - in a continuous-time real-options model of capacity investment. Our methodology allows the evaluation of investment options and exercise rules in a strategic setup. In the initial industry...

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 study the development of a duopoly industry -evolution of firm capacities and competitive behavior- in a continuous-time real-options model of capacity investment. Our methodology allows the evaluation of investment options and exercise rules in a strategic setup. In the initial industry...

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...