We study a stochastic dynamic game of process innovation in which firms can initiate and terminate R&D efforts and production at different times. We discern the impact of knowledge spillovers on the investments in existing markets, as well as on the likely structure of newly forming markets, for...

In the text-book model of dynamic Bertrand competition, competing firms meet the same demand function every period. This is not a satisfactory model of the demand side if consumers can make intertemporal substitution between periods. Each period then leaves some residual demand to future...

We characterize sequential (preemption) and simultaneous (coordination) equilibria, as well as joint-value maximizing (cooperation) solutions, in a model of investment timing allowing for externalities in both flow profits and investment costs. For two ex-ante symmetric firms, either preemption...

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...

This paper examines strategic investment in the context of a duopolistic continuous-time real options game. Our contribution is twofold, economic and methodological. The former is the recognition that, under fixed costs of investment and time-to-build, the firm pays a fraction of the implicit...

We study a new real options model of oligopolistic entry based on empirical evidence of demand for a new product growing over time and eventually falling. Yet, firms do not know ex ante when this can occur, which creates incentives to update information by delaying irreversible entry. By...

This paper analyzes how the implementation of the Receiver Party Pays regime affects networks operators' pricing strategies in a model of dynamic competition. We characterize the equilibrium and provide sufficient conditions under which it exists and is unique. We show that in equilibrium...