The seminal work of Fudenberg and Tirole (1985) on how preemption erodes the value

of an option to wait raises general questions about the relation between models in discrete

and continuous time and thus about the interpretation of its central result, relying on an

“infinitely fine grid”. Here it is shown that the preemption equilibrium is the limit of the

unique symmetric equilibria of the game when reduced to any sequence of grids becoming

infinitely fine. Furthermore, additional subgame perfect equilibria using conventional

continuous-time mixed strategies are identified.