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This study investigates the design of the royalty rate in a first-price auction across three types of investments … royalty rate for the three types of investments exhibits two different patterns. When investment is either incremental or … charge differential royalty rates for different types of investments. …
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-term market equilibria and investments in infrastructure while accounting for market power by certain suppliers. They are widely …
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We estimate the effect of electorally induced policy uncertainty on investment in the manufacturing sector. Because state governors exercise considerable influence over legislation and considerable discretion over regulation and permitting, and because the policies relevant to business...
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This paper studies the aggregate implications of microeconomic investment irreversibility and idiosyncratic uncertainty in a simple growth model by highlighting real option effects. We endogenize the drift rate of real option by connecting it to the state of the economy. Thereby, we extend the...
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In this paper we analyse a dynamic model of investment under uncertainty in a duopoly, in which each firm has an option to switch from the present market to a new market. We construct a subgame perfect equilibrium in mixed strategies and show that both preemption and attrition can occur along...
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