Time-to-build investment and uncertainty in oligopoly
|Title:||Time-to-build investment and uncertainty in oligopoly||Authors:||Dewit, Gerda; Leahy, Dermot||Permanent link:||http://hdl.handle.net/10197/1304||Date:||Feb-2002||Online since:||2009-07-27T13:31:13Z||Abstract:||This paper examines how time to build alters strategic investment behaviour under oligopoly. Facing demand uncertainty, firms decide whether to invest early or wait until uncertainty has been resolved. A game that captures time-to-build investment is contrasted with another one in which investment is quick in place. We show that a time lag between when and how much to invest reduces the incentive to delay. When investment requires time to complete, early investment occurs more to avoid becoming a follower than to become a strategic investment leader. The opposite is true with quick-in-place investment. A brief welfare analysis is provided.||Funding Details:||ASEAN-EC Management Centre (AEMC)||Type of material:||Working Paper||Publisher:||University College Dublin. School of Economics||Series/Report no.:||UCD Centre for Economic Research Working Paper Series; WP02/07||Keywords:||Time-to-build investment; Uncertainty; Strategic commitment; Flexibility; Oligopoly||JEL Codes:||D80; L13||Subject LCSH:||Investments
|Other versions:||http://www.ucd.ie/economics/research/papers/2002/WP02.07.pdf||Language:||en||Status of Item:||Not peer reviewed||This item is made available under a Creative Commons License:||https://creativecommons.org/licenses/by-nc-sa/1.0/|
|Appears in Collections:||Economics Working Papers & Policy Papers|
Show full item record
Page view(s) 501,531
If you are a publisher or author and have copyright concerns for any item, please email firstname.lastname@example.org and the item will be withdrawn immediately. The author or person responsible for depositing the article will be contacted within one business day.