Please use this identifier to cite or link to this item: https://hdl.handle.net/1822/30415

TitleInvestment decisions in finite-lived monopolies
Author(s)Pereira, Paulo Jorge
Rodrigues, Artur
KeywordsFinite-lived monopolies
Real option games
Uncertainty
Real options
Issue date2014
PublisherElsevier
JournalJournal of economic dynamics and control
Abstract(s)This paper studies the value and optimal timing for investment in finite-lived monopolies, extending the literature on real option games by considering the cases of random and certain-lived monopolies. Under these settings, firms face the risk of demonopolization, that can occur as a random or a certain event. We show that these new settings produce significantly different results when compared to the canonical monopolistic and duopolistic models. In a certain-lived monopoly, the leader invests sooner than in a duopoly if there is a risk of being preempted, and later than in a monopoly if the leader role is pre-assigned. In a random-lived monopoly, entry occurs somewhere between the duopoly and monopoly cases. Higher uncertainty delays investment in all cases.
TypeArticle
URIhttps://hdl.handle.net/1822/30415
DOI10.1016/j.jedc.2014.07.003
ISSN0165-1889
Publisher versionhttp://www.sciencedirect.com/science/article/pii/S0165188914001663
Peer-Reviewedyes
AccessRestricted access (UMinho)
Appears in Collections:NIPE - Artigos em Revistas de Circulação Internacional com Arbitragem Científica

Files in This Item:
File Description SizeFormat 
Investment decisions.pdf
  Restricted access
Investment decisions in finite-lived monopolies7,34 MBAdobe PDFView/Open

Partilhe no FacebookPartilhe no TwitterPartilhe no DeliciousPartilhe no LinkedInPartilhe no DiggAdicionar ao Google BookmarksPartilhe no MySpacePartilhe no Orkut
Exporte no formato BibTex mendeley Exporte no formato Endnote Adicione ao seu ORCID