This paper investigates the interactions between preemptive competition and leverage in a duopoly market. We investigate both a case in which the firms have optimal financial structures, and a case in which financing constraints require firms to finance their investments by debt. Our findings...

This paper investigates a duopoly with two alternative investment projects. We examine a situation in which a firm cannot invest in any project that has been taken by the rival firm. The first mover's advantage in project choice leads to an equilibrium quite different from that in previous...

This paper investigates a principal-agent model in which an owner (principal) optimizes a contract with a manager (agent) who has been delegated to undertake an investment project. In the model, we explore the effects of costly exploration by which the manager learns the real value of...

In this paper, we examine the interactions between investment timing and management effort in the presence of asymmetric information between the owner and the manager where the manager has an informational advantage. We find that investment timing is later under asymmetric information than under...