Quick or Persistent? Strategic Investment Demanding Versatility

摘要: In this paper we analyse a dynamic model of investment under uncertainty in duopoly, which each firm has an option to switch from the present market new market. We construct subgame perfect equilibrium mixed strategies and show that both preemption attrition can occur along typical paths. order determine region two-dimensional constrained optimal stopping problem needs be solved, for characterize non-trivial boundary state space. We explicitly Markovian rates there is always positive probability eventual preemption, contrasting deterministic version model. A simulation-based numerical example illustrates the shows relative likelihoods taking place regions.