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)...

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 a simple duopoly model of preemption with multiple investments and instantaneous Bertrand competition in a stochastically growing market. Different patterns of equilibria may arise, depending on the importance of the real option effect. If the average growth rate of the market is close...

As development proceeds, the demand for environmental protection increases. We study optimal investment decision rules when protection investments are irreversible and indivisible. We show that myopia (focusing on one particular outlay without considering investments that are to come later in...

We show that information asymmetry may not cause any distortion in product differentiation. This contrasts with the main result of the literature on signaling which stresses that information asymmetry has a non negligible impact on strategic behavior. A thorough analysis of the...

We consider a simple model of incomplete information in location theory. Two firms compete in a two stage framework: a sequential location stage and a price competition stage. Firm 1 knows both its own constant marginal cost technology and that of Firm 2, whereas the latter has incomplete...

We study the development of a duopoly in a continuous-time model of capacity investment under no commitment by firms regarding future actions. While capacity units are costly, indivisible, durable, and large relative to market size, early entry cannot secure a first-mover advantage and both...

We study the interactions between equity financing and strategic technological flexibility choices of firms facing a threat of costly bankruptcy. We show that a firm's level of financial hardship is an important determinant of the level and type of investment it chooses to make, either a less...

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

How does asymmetric information (regarding production costs) in a spatial market alter the behavior of the incumbent firm which can credibly commit to her location choice? Although entry deterrence is irrelevant here, our analysis shows that entry blockading behavior emerges not only as the...