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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18749| Title: | Optimal R&D investment strategies with quantity competition under the threat of superior entry |
| Keywords: | D21 C72 O31 ddc:330 investment under uncertainty real options R&D competition Industrielle Forschung Investition Entscheidung bei Unsicherheit Realoption Potenzieller Wettbewerb Markteintritt Duopol Innovationswettbewerb Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | This paper studies R&D investment decisions of a firm facing the threat of new technology entry and subject to technical uncertainty. We distinguish four scenarios: inevitable entry, entry deterrence, entry blockade, and non-credible entry threat. The entry threat stimulates the incumbent to innovate in case entry prevention is possible, but discourages R&D if entry is inevitable. In the case of entry deterrence the incumbent successfully prevents entry by innovating. Greater technical uncertainty stimulates starting R&D and can result in implementation of more expensive research projects. The welfare analysis shows that the relation between welfare and entry cost and between welfare and uncertainty is nonmonotonic. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18749 |
| Other Identifiers: | http://hdl.handle.net/10419/18749 ppn:479268053 |
| Appears in Collections: | EconStor |
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