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Hellmann, Tobias; Thijssen, Jacco J. J. - 2015

In this paper we study a two-player investment game with a first mover advantage in continuous time with stochastic payoffs, driven by a geometric Brownian motion. One of the players is assumed to be ambiguous with maxmin preferences over a strongly rectangular set of priors. We develop a...

Persistent link: https://www.econbiz.de/10010468336

Strategic Investments with Competition Under Uncertainty in the ASEAN/AEC : A Game-Theoretic Real Options Analysis

Los, Cornelis A. - 2014

market, to be completed by 2020. The single market will boost the competition in both ASEAN's internal and external markets …

Persistent link: https://www.econbiz.de/10013061529

Quick or persistent? : strategic investment demanding versatility

Steg, Jan-Henrik; Thijssen, Jacco J. J. - 2015

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...

Persistent link: https://www.econbiz.de/10011284232

A Dynamic Duopoly Investment Game Without Commitment Under Uncertain Market Expansion

Boyer, Marcel - 2011

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...

Persistent link: https://www.econbiz.de/10013119144

Strategic investment with positive externalities

Steg, Jan-Henrik; Thijssen, Jacco J. J. - 2022

We study strategic investment in continuous time with positive externalities of changing magnitude. Our model particularly allows for two correlated risk factors. Constructing subgame-perfect equilibria with pure and mixed strategies, we observe the novel effect that it is important for the...

Persistent link: https://www.econbiz.de/10015422108

Real Options and Signaling in Strategic Investment Games

Watanabe, Takahiro - 2011

A game in which an incumbent and an entrant decide the timings of entries into a new market is investigated. The profit flows involve two uncertain factors: (1) the basic level of the demand of the market observed only by the incumbent and (2) the fluctuation of the profit flow described by a...

Persistent link: https://www.econbiz.de/10014178766

Preemption Games Under Levy Uncertainty

Boyarchenko, Svetlana - 2011

We study a stochastic version of Fudenberg and Tirole's (1985) preemption game to analyze the effects of jumps in the underlying uncertainty on equilibrium strategies. Two firms contemplate entering a new market where the demand follows a jump-diffusion process. Firms differ is the sunk costs of...

Persistent link: https://www.econbiz.de/10013125149

Preemption Games Under Levy Uncertainty

Boyarchenko, Svetlana - 2014

We study a stochastic version of Fudenberg -- Tirole's preemption game. Two firms contemplate entering a new market with stochastic demand. Firms differ in sunk costs of entry. If the demand process has no upward jumps, the low cost firm enters first, and the high cost firm follows. If leader's...

Persistent link: https://www.econbiz.de/10013045255

Competition and Product Innovation in Dynamic Oligopoly

Goettler, Ronald L.; Gordon, Brett R. - 2013

We investigate the relationship between competition and innovation using a dynamic oligopoly model that endogenizes … both the long-run innovation rate and market structure. We use the model to examine how various determinants of competition …

Persistent link: https://www.econbiz.de/10014042417

Differentiating to Reduce Strategic Uncertainty and Relax Competition

Smyth, Andrew - 2022

and relaxed competition. In its theory, firms compete over an infinite-horizon and discount the future so that relaxed … competition is feasible in equilibrium. However, firms face strategic uncertainty, so this equilibrium hinges on their beliefs … about their rivals' pursuit of relaxed competition. In this setting, certain beliefs can support differentiation and …

Persistent link: https://www.econbiz.de/10014077162