Optimal Investment Decisions for Two Positioned Firms Competing in a Duopoly Market with Hidden Competitors

• Tipo: Artigo em Revista Científica Internacional
• Data: 2011

Autores

Armada, Manuel R (Autor) Outra; Lawrence Kryzanowski (Autor) FEP; Paulo Jorge Pereira (Autor) Outra

Revista

Título: European Financial Management

Vol. 17 Nº 2

Páginas: 305-330

ISSN: 1354-7798

Editora: Wiley-Blackwell

Indexação

ISI Web of Knowledge - 11 Citações

ISI Web of Science

Scopus - 15 Citações

Classificação Científica

FOS: Ciências sociais > Economia e gestão

Outras Informações

ID Authenticus: P-002-TY5

DOI: 10.1111/j.1468-036x.2009.00514.x

Abstract (EN): This paper extends the literature dealing with the option to invest in a duopoly market for a leader-follower setting. A restrictive assumption embodied in the models in the current literature is that investment opportunities are semi-proprietary in that the two identified or positioned firms are guaranteed to hold at least the follower's position. More competition is realistically captured in our model by introducing the concept of hidden rivals so that the places in the market can be taken not only by positioned firm but also by these hidden competitors. The value functions and the optimal triggers for the positioned firms differ materially in settings with(out) the presence of hidden rivals. Unlike existing models, our model allows for (a)symmetric market shares and investment costs for the leader and the follower. Cooperative entrance by the two positioned firms is also modelled.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 26