This paper considers the problem of investment timing under uncertainty in a duopoly framework.When both firms want to be the first investor a coordination problem arises.Here, a method is proposed to deal with this coordination problem, involving the use of symmetric mixed strategies.The method...

As becomes apparent from the standard text books in industrial organization (cf.Tirole, 1988, The Theory of Industrial Organization), the analysis of the e.ects of uncertainty within this field is yet underdeveloped.This paper shows that the new theory of strategic real options can be used to...

We consider a firm's decision to replace an existing production technology with a new, more cost-efficient one.Kulatilaka and Perotti [1998, Management Science] nd that, in a two-period model, increased product market uncertainty could encourage the firm to invest strategically in the new...

We describe non-cooperative game models and discuss game theoretic solution<br/>concepts. Some applications are also noted. Conventional theory focuses on the<br/>question ‘how will rational players play?’, and has the Nash equilibrium at its core.<br/>We discuss this concept and its interpretations, as...

This paper introduces a simple extensive form pricing game.The Bertrand outcome is a Nash equilibrium outcome in this game, but it is not necessarily subgame perfect.The subgame perfect equilibrium outcome features the following comparative static properties.The more similar firms are, the...