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Author(s): Paulo Jorge Pereira
Armada, Manuel R
Title: The Optimal Decision to Invest in a Duopoly Market for (Two) Positioned Companies when there are Hidden Competitors
Issue Date: 2004
Abstract: The aim of this paper is to study the option to invest in a duopoly market, allowing for more competitors to enter the market. In fact, we relax the common assumption which states that (only) two firms compete for the two places in the market. In the existing models, the problem consists of, basically, defining which one will be the leader, which will be the follower, and when. We can say that, in these settings, the investment opportunities are semi-proprietary, since the follower's position is, at least, guaranteed for both firms. As we said, our approach relaxes this assumption, allowing for more than two competitors for the positions on the duopoly. This additional competition has, as we will see, a major impact on the decision to invest. We also allow for both ex-post symmetry and ex-post asymmetry, and for asymmetrical investment costs for the leader and for the follower.
Subject: Outras ciências sociais
Other social sciences
Scientific areas: Ciências sociais::Outras ciências sociais
Social sciences::Other social sciences
Source: 8th Annual International Conference on Real Options
Document Type: Artigo em Livro de Atas de Conferência Internacional
Rights: restrictedAccess
Appears in Collections:FEP - Artigo em Livro de Atas de Conferência Internacional

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