This paper studies a class of continuous-time stochastic games in which the actions of a long-run player have a persistent effect on payoffs. For example, the quality of a firm's product depends on past as well as current effort, or the level of a policy instrument depends on a government's past...

The seminal work of Fudenberg and Tirole [Preemption and Rent Equalization in the Adoption of New Technology, Rev. Econ. Stud., 1985] on how preemption erodes the value of an option to wait raises general questions about the relation between models in discrete and continuous time and thus about...