CEF.UP – FIN Seminar/Webinar
Thursday – September 28th, 2023 at 1:00 p.m. | Room 305| Online
"First and Second Mover Advantages in Strategic Investment under Uncertainty"
Peter Kort – Tilburg University (joint
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Event Details
CEF.UP – FIN Seminar/Webinar
Thursday – September 28th, 2023 at 1:00 p.m.| Room 305| Online
“First and Second Mover Advantages in Strategic Investment under Uncertainty”
Peter Kort– Tilburg University (joint work with Berend J. Stofferis, and Jacco J.J. Thijssen)
Abstract:
“We study a strategic duopoly investment game in which two firms decide on timing and size of an investment under iso-elastic demand. We find that, in equilibrium, investment can be preemptive or resulting from a war of attrition. This contrasts with existing literature that only finds preemptive investment. We show numerically that the presence of a second mover advantage can delay investment inefficiently long from a social welfare perspective.”