Time-to-build investment and uncertainty in oligopoly

Files in This Item:
File Description SizeFormat 
WP02.07.pdf113.81 kBAdobe PDFDownload
Title: Time-to-build investment and uncertainty in oligopoly
Authors: Dewit, GerdaLeahy, 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 investmentUncertaintyStrategic commitmentFlexibilityOligopoly
JEL Codes: D80; L13
Subject LCSH: Investments
Uncertainty
Oligopolies
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Status of Item: Not peer reviewed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) 50

1,531
Last Week
3
Last month
15
checked on Jan 16, 2021

Download(s)

117
checked on Jan 16, 2021

Google ScholarTM

Check


If you are a publisher or author and have copyright concerns for any item, please email research.repository@ucd.ie and the item will be withdrawn immediately. The author or person responsible for depositing the article will be contacted within one business day.