We propose a simple model of competition for the production of energy between a thermal station and an hydrostation. We show analytically and geometrically that, despite its static characteristics, the output from the thermal station is determined by the intertemporal specifications of costs and...

We study the development of an industry-evolution of capacity, production and prices- in a continuous-time real-options model under various assumptions on competition. Investment takes the form of sequential acquisition of indivisible units of capacity. As benchmarks, we determine the optimal...