Closure Options in a Duopoly with Strong Strategic Externalities

摘要: This paper examines exercise policies for closure options in a duopoly with uncertain (inverse) demand and strong strategic externalities. First, we consider symmetric contrast the resulting equilibrium disinvestment behavior of monopoly myopic firms. Second, equilibria asymmetric model are derived it is shown that level uncertainty may affect number prevailing equilibria. Finally, two main results (a) duopolists disinvest later than monopolist earlier firms (b) an increase market price volatility makes externalities less important discussed related to existing literature.