Competition and Irreversible Investments under Uncertainty
نویسندگان
چکیده
منابع مشابه
Competition and irreversible investments under uncertainty
We examine the effect of competition on investment decisions in an industry in which each firm has a completely irreversible investment opportunity and the product market has positive externalities for a small market size and negative externalities for a large market size. In the latter case, which corresponds to the traditional competitive industries, firms invest sequentially as market profit...
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We examine the agent’s investment level in a project with potential high-risk consequences. In order to reduce uncertainty, the agent may acquire costly information. We first find that both a very optimistic agent (who thinks that the damage has low probability to occur) and a very pessimistic agent never acquire information because information is not valuable for them. Yet, with information, t...
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Consider a Bertrand model in which each rm may be inactive with a known probability, so the number of active rms is uncertain. This activity level can be endogenized in any of several ways{ as whether to incur a xed cost of activity, as output choice, or as quality choice. Our model has a mixed-strategy equilibrium, in which industry pro ts are positive and decline with the number of rms, the s...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2003
ISSN: 1556-5068
DOI: 10.2139/ssrn.406401