Leahy, Dermot (2006) Investment timing under uncertainty in oligopoly: Symmetry or leadership? Journal of Economics and Business, 58 (1). pp. 1-19. ISSN 0148-6195

Preview

Download (425kB) | Preview

Abstract

This paper examines firms’ investment-timing decisions in an oligopolistic set-up. Facing demand uncertainty, firms decide whether to invest early or wait until uncertainty has been resolved. We show that the precise form that investment commitment takes matters for the investment-timing outcomes that emerge. When firms can commit immediately to the final investment level, investment leadership may occur and early investment is referred to as being primarily “aggressive”. By contrast, the presence of a time lag between when and how much firms invest yields symmetric investment-timing outcomes only; we argue that early investment is mainly “defensive” in that case.

Item Type:	Article
Keywords:	Uncertainty; Flexibility; Strategic commitment;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	8462
Identification Number:	https://doi.org/10.1016/j.jeconbus.2005.05.003
Depositing User:	Dermot Leahy
Date Deposited:	18 Jul 2017 09:04
Journal or Publication Title:	Journal of Economics and Business
Publisher:	Elsevier
Refereed:	Yes
URI:	Publisher
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

Repository Staff Only(login required)

Item control page

Downloads

Origin of downloads