Strategic investment in technological innovations

Investment in Technological Innovations under Rivalry and Uncertainty.dvi

Investments in the area of technological innovations are particularly risky, since, apart from price uncertainty, firms must take into account not only uncertainty in the arrival of innovations but also the presence of potential rivals. Therefore, we develop an analytical framework for sequential investment in order to determine how duopolistic competition impacts a firm’s technology adoption s...

Strategic Exercise of Real Options: Investment Decisions in Technological Systems

Viewing investment projects in new technologies as real options, this paper studies the effects of endogenous competition and asymmetric information on the strategic exercise of real options. We first develop a multi-period, game-theoretic model and show how competition leads to early exercise and aggressive investment behaviors and how competition erodes option values. We then relax the typica...

Recent Technological Innovations in Aquaculture

Strategic Technology Adoption under Technological Uncertainty

Strategic Investment in Networks

We examine how the presence of network effects influences investment decisions. Building a network requires significant upfront investment but benefits carry tremendous uncertainty. This creates an incentive to defer the commitment of irreversible investments. However, such investments may also create the opportunity to convince the consumers about the network’s size, establish a network standa...