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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
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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: | 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 |
| Related URLs: | |
| URI: | https://mural.maynoothuniversity.ie/id/eprint/8462 |
| 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 |
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