Investment under regime uncertainty: Impact of competition and preemption

Katsumasa Nishide and Kyoko Yagi

International Journal of Industrial Organization, 2016, vol. 45, issue C, 47-58

Abstract: In this study, we analyze the investment-timing problem and introduce a model of two firms competing for investment preemption, each of which knows in advance the time at which the economic condition that will have an impact on the investment changes. We qualitatively show how two firms strategically optimize their investment timing, taking into account competition and preemption.

Keywords: Investment timing; Competition; Preemption; Real options (search for similar items in EconPapers)
JEL-codes: D43 D92 G32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:45:y:2016:i:c:p:47-58

DOI: 10.1016/j.ijindorg.2016.01.001

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