Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework

Huberts NFD, Dawid H, Huisman K, Kort PM (2015) Working Papers in Economics and Management; 02-2015.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

Diskussionspapier | Veröffentlicht | Englisch
 
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Abstract / Bemerkung
This paper examines a dynamic incumbent-entrant framework with stochastic evolution of the (inverse) demand, in which both the optimal timing of the investments and the capacity choices are explicitly considered. We find that the incumbent invests earlier than the entrant and that entry deterrence is achieved through timing rather than through overinvestment. This is because the incumbent invests earlier and in a smaller amount compared to a scenario without potential entry. If, on the other hand, the capacity size is exogenously given, the investment order changes and the entrant invests before the incumbent does.
Stichworte
Incumbent/Entrant; Capacity choice; Investment under Uncertainty; Oligopoly; Real-Option Games; innovation economics; dynoli; etace_innovation_economics
Erscheinungsjahr
2015
Band
02-2015
Seite(n)
43
ISSN
2196-2723
Page URI
https://pub.uni-bielefeld.de/record/2901419

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Huberts NFD, Dawid H, Huisman K, Kort PM. Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework. Working Papers in Economics and Management. Vol 02-2015. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2015.
Huberts, N. F. D., Dawid, H., Huisman, K., & Kort, P. M. (2015). Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework (Working Papers in Economics and Management, 02-2015). Bielefeld: Bielefeld University, Department of Business Administration and Economics. doi:10.4119/unibi/2901419
Huberts, N. F. D., Dawid, H., Huisman, K., and Kort, P. M. (2015). Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework. Working Papers in Economics and Management, 02-2015, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Huberts, N.F.D., et al., 2015. Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework, Working Papers in Economics and Management, no.02-2015, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
N.F.D. Huberts, et al., Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework, Working Papers in Economics and Management, vol. 02-2015, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2015.
Huberts, N.F.D., Dawid, H., Huisman, K., Kort, P.M.: Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework. Working Papers in Economics and Management, 02-2015. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2015).
Huberts, Nick F.D., Dawid, Herbert, Huisman, Kuno, and Kort, Peter M. Entry Deterrence by Timing Rather than Overinvestment in a Strategic Real Options Framework. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2015. Working Papers in Economics and Management. 02-2015.
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2019-09-06T09:18:36Z
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