Duopolistic competition under risk aversion and uncertainty

A monopolist typically defers entry into an industry as both price uncertainty and the level of relative risk aversion increase. The former attribute may be present in most deregulated industries, while the latter may be relevant for reasons of market incompleteness or the presence of technical uncertainty. By contrast, it has been shown that the presence of a rival hastens entry under risk neutrality in certain frameworks. Here, we examine how duopolistic competition affects the entry decisions of risk-averse investors. We also explore how the impact of competition on the value of a firm under two different oligopolistic frameworks varies with risk aversion and