## Investment Decisions, Choice Value and Preemption when Demand is Uncertain

### Détails

Télécharger : BIB_48A6D8BEBACA.P001.pdf (488.97 [Ko])

Etat: Serval

Version: de l'auteur

Etat: Serval

Version: de l'auteur

ID Serval

serval:BIB_48A6D8BEBACA

Type

**Non publié**: un document ayant un auteur et un titre, mais non publié.

Collection

Publications

Fonds

Titre

Investment Decisions, Choice Value and Preemption when Demand is Uncertain

Date de publication

2007

Notes

Working paper

Résumé

We study the investment decision problem of a duopoly with price competition on a market of finite size driven by stochastic taste shocks. Each player has the choice between two technologies: a large unit and a small one. We prove that different equilibria may exist depending on the parameters' values: simultaneous investment equilibrium in the small unit or two mixed strategy equilibria, one in which each firm invests in the large unit with a strictly positive intensity and another one in which each firm invests with a strictly positive intensity in the small unit and in the large unit. The inaction regions where both technologies provide expected net payoffs that are too similar do not survive the introduction of preemption. Moreover, we prove that for some values of the demand, the preemption equilibrium is more efficient than the joint adoption equilibrium.

Mots-clé

K3

Création de la notice

19/11/2007 11:25

Dernière modification de la notice

18/11/2016 14:22