Strategic capacity investment under uncertainty

• 成果类型: Article
• 署名作者: Huisman, Kuno J. M.; Kort, Peter M.
• 署名单位: Tilburg University; ASML Holding; University of Antwerp
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12089
• 发表日期: 2015
• 页码: 376-408
• 关键词: irreversible investment; entry-deterrence; real-options; CHOICE; TECHNOLOGY; projects; duopoly; demand; models

摘要

This article considers investment decisions within an uncertain dynamic and duopolistic framework. Each investment decision involves to determine the timing and the capacity level. The simultaneous analysis of timing and capacity decisions extends work on entry deterrence/accommodation to consider a timing/delay element. We find that, when applying an entry deterrence policy, the first investor, or incumbent, overinvests in capacity for two reasons. First, it delays the investment of the second investor, or entrant. Second, the entrant will invest in less capacity. We also find that greater uncertainty makes entry deterrence more likely.