This article examines timing and profits in investment-timing games where two or more firms vie to make an indivisible one-time investment. It shows that whether perfect-Nash equilibrium timing strategies eliminate rents depends on whether it is costly for rivals to threaten preemption credibly....

Scale economies in industrial plants confer a tradeoff on firms between the capacity of production facilities and the average cost of production. This tradeoff is central to firms' capacity expansion decisions in growing industries. This article imbeds the cost versus capacity tradeoff in an...