TY  - GEN
AB  - This paper examines a dynamic incumbent-entrant framework with stochastic evolution of the (inverse)
demand, in which both the optimal timing of the investments and the capacity choices are explicitly
considered. We find that the incumbent invests earlier than the entrant and that entry deterrence is
achieved through timing rather than through overinvestment. This is because the incumbent invests
earlier and in a smaller amount compared to a scenario without potential entry. If, on the other hand,
the capacity size is exogenously given, the investment order changes and the entrant invests before the
incumbent does.
DA  - 2015
DO  - 10.4119/unibi/2901419
KW  - Incumbent/Entrant
KW  - Capacity choice
KW  - Investment under Uncertainty
KW  - Oligopoly
KW  - Real-Option Games
KW  - innovation economics
KW  - dynoli
KW  - etace_innovation_economics
LA  - eng
PY  - 2015
SN  - 2196-2723
SP  - 43-
TI  - Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29014197
Y2  - 2024-11-22T02:24:34
ER  -