Strategic capacity investment under uncertainty

RAND Journal of Economics

Volumn 46, Issue 2, 2015, Pages 376-408

  Huisman, Kuno J M ^a   Kort, Peter M ^b  

^a TILBURG UNIVERSITY   (Netherlands)

^b UNIVERSITY OF ANTWERP   (Belgium)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84928176964     PISSN: 07416261     EISSN: 17562171     Source Type: Journal    
DOI: 10.1111/1756-2171.12089     Document Type: Article

References (29)

1. Aguerrevere, F. "Equilibrium Investment Strategies and Output Price Behavior: A Real-Options Approach." Review of Financial Studies, Vol. 16 (2003), pp. 1239-1272.
2. Azevedo, A. and Paxson, D. "Developing Real Options Game Models." European Journal of Operational Research, Vol. 237 (2014), pp. 909-920.
3. Bar-Ilan, A. and Strange, W. "The Timing and Intensity of Investment." Journal of Macroeconomics, Vol. 21 (1999), pp. 57-77.
4. Besanko, D., Doraszelski, U., Xiaogyuan Lu, L., and Satterthwaite, M. "Lumpy Capacity Investment and Disinvestment Dynamics." Operations Research, Vol. 58 (2010), pp. 1178-1193.
5. Chevalier-Roignant, B. and Trigeorgis, L. Competitive Strategy: Options and Games. Cambridge, Mass.: MIT Press, 2011.
6. Chicu, M. "Dynamic Investment and Deterrence in the U.S. Cement Industry." Northwestern University, Evanston, IL, 2012.
7. Dangl, T. "Investment and Capacity Choice under Uncertain Demand." European Journal of Operational Research, Vol. 117 (1999), pp. 415-428.
8. Decamps, J.P., Mariotti, T., and Villeneuve, S. "Irreversible Investment in Alternative Projects." Economic Theory, Vol. 28 (2006), pp. 425-448.
9. Dixit, A. "A Model of Duopoly Suggesting a Theory of Entry Barriers." Bell Journal of Economics, Vol. 10 (1979), pp. 20-32.
10. Dixit, A. "The Role of Investment in Entry-Deterrence." Economic Journal, Vol. 90 (1980), pp. 95-106.
11. Dixit, A. "Choosing Among Alternative Discrete Investment Projects under Uncertainty." Economics Letters, Vol. 41 (1993), pp. 265-268.
12. Dixit, A. and Pindyck, R. Investment under Uncertainty. Princeton, NJ: Princeton University Press, 1994.
13. Dockner, E. and Mosburger, G. "Capital Accumulation, Asset Values and Imperfect Product Market Competition." Journal of Difference Equations and Applications, Vol. 13 (2007), pp. 197-215.
14. Fudenberg, D. and Tirole, J. "Preemption and Rent Equalization in the Adoption of New Technology." Review of Economic Studies, Vol. 52 (1985), pp. 383-401.
15. Goyal, M. and Netessine, S. "Strategic Technology Choice and Capacity Investment under Demand Uncertainty." Management Science, Vol. 53 (2007), pp. 192-207.
16. Grenadier, S. Game Choices: The Intersection of Real Options and Game Theory. London: Risk Books, 2000.
17. He, H. and Pindyck, R. "Investments in Flexible Production Capacity." Journal of Economic Dynamics and Control, Vol. 16 (1992), pp. 575-599.
18. Huisman, K. Technology Investment: A Game Theoretic Real Options Approach. Dordrecht, The Netherlands: Kluwer Academic Publishers, 2001.
19. Huisman, K., Kort, P., Pawlina, G., and Thijssen, J. "Strategic Investment under Uncertainty: Merging Real Options with Game Theory." Zeitschrift für Betriebswirtschaft, Vol. 67 (2004), pp. 97-123.
20. Manne, A. "Capacity Expansion and Probabilistic Growth." Econometrica, Vol. 29 (1961), pp. 632-649.
21. Maskin, E. "Uncertainty and Entry Deterrence." Economic Theory, Vol. 14 (1999), pp. 429-437.
22. Pawlina, G. and Kort, P. "Real Options in an Asymmetric Duopoly: Who Benefits from Your Competitive Disadvantage?" Journal of Economics and Management Strategy, Vol. 15 (2006), pp. 1-35.
23. Pindyck, R. "Irreversible Investment, Capacity Choice, and the Value of the Firm." American Economic Review, Vol. 78 (1988), pp. 969-985.
24. Spence, A. "Entry, Capacity, Investment and Oligopolistic Pricing." Bell Journal of Economics, Vol. 8 (1977), pp. 534-544.
25. Thijssen, J., Huisman, K., and Kort, P. "Symmetric Equilibrium Strategies in Game Theoretic Real Option Models." Journal of Mathematical Economics, Vol. 48 (2012), pp. 219-225.
26. Tirole, J. The Theory of Industrial Organization. Cambridge, Mass.: MIT Press, 1988.
27. Trigeorgis, L. Real Options: Managerial Flexibility and Strategy in Resource Allocation. Cambridge, Mass.: MIT Press, 1996.
28. Wu, J. "Capacity Preemption and Leadership Contest in a Market with Uncertainty." Mimeo, University of Arizona, Tucson, 2007.
29. Yang, M. and Zhou, Q. "Real Options Analysis for Efficiency of Entry Deterrence with Excess Capacity." Systems Engineering - Theory & Practice, Vol. 27 (2007), pp. 63-70.