Investment Decisions in a New Mixed Market

Kazuhiro Ohnishi
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Kazuhiro Ohnishi: Osaka University and Institute for Basic Economic Science

Annals of Economics and Finance, 2006, vol. 7, issue 2, 271-281

Abstract: The analysis in Fudenberg and Tirole (1983) discusses the perfect equilibria of a continuous-time model of the strategic investment decisions of two profitmaximizing private firms in a new market and suggests that there are perfect equilibria where each firm does not invest to its steady-state reaction curve. This paper examines the perfect equilibria of a continuous-time model of the strategic investment decisions of a social-welfare-maximizing public firm and a profit-maximizing private firm in a new market and shows that there are no perfect equilibria where each firm does not invest to its steady-state reaction curve in the mixed model.

Keywords: Continuous-time model; Investment decision; New mixed market (search for similar items in EconPapers)
JEL-codes: C72 D21 H42 L30 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2006:v:7:i:2:p:271-281

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