When a firm faces an uncertain demand, it is common to procure supply using some type of option in addition to spot purchases. A typical version of this problem involves capacity being purchased in advance, with a separate payment made that applies only to the part of the capacity that is...

The paper analyses the properties and outcomes of competitive dynamics in industries characterized by heterogeneous firms and continuing stochastic entry. A formal analytical apparatus is developed, able to derive some generic properties of the underlying competition process combining persistent...