Benoît Chevalier-Roignant and Lenos Trigeorgis
- Published in print:
- 2011
- Published Online:
- August 2013
- ISBN:
- 9780262015998
- eISBN:
- 9780262298711
- Item type:
- book
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262015998.001.0001
- Subject:
- Economics and Finance, Econometrics
Corporate managers who face both strategic uncertainty and market uncertainty confront a classic trade-off between commitment and flexibility. They can stake a claim by making a large capital ...
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Corporate managers who face both strategic uncertainty and market uncertainty confront a classic trade-off between commitment and flexibility. They can stake a claim by making a large capital investment today, influencing their rivals’ behavior; or they can take a “wait and see” approach to avoid adverse market consequences tomorrow. This book describes an emerging paradigm that can quantify and balance commitment and flexibility—“option games” by which the decision-making approaches of real options and game theory can be combined. The book first discusses prerequisite concepts and tools from basic game theory, industrial organization, and real options analysis, bringing important materials and ideas together into a unified framework. It then presents the new approach in discrete time and later in continuous time, beginning with the building blocks of the basic ideas and tools and culminating in richer theoretical analyses.Less
Corporate managers who face both strategic uncertainty and market uncertainty confront a classic trade-off between commitment and flexibility. They can stake a claim by making a large capital investment today, influencing their rivals’ behavior; or they can take a “wait and see” approach to avoid adverse market consequences tomorrow. This book describes an emerging paradigm that can quantify and balance commitment and flexibility—“option games” by which the decision-making approaches of real options and game theory can be combined. The book first discusses prerequisite concepts and tools from basic game theory, industrial organization, and real options analysis, bringing important materials and ideas together into a unified framework. It then presents the new approach in discrete time and later in continuous time, beginning with the building blocks of the basic ideas and tools and culminating in richer theoretical analyses.
Benoît Chevalier-Roignant and Lenos Trigeorgis
- Published in print:
- 2011
- Published Online:
- August 2013
- ISBN:
- 9780262015998
- eISBN:
- 9780262298711
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262015998.003.0012
- Subject:
- Economics and Finance, Econometrics
This chapter examines preemptive investments and the possibility of tacit collusion among firms, delaying investment until a later date. It first presents the original deterministic model by ...
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This chapter examines preemptive investments and the possibility of tacit collusion among firms, delaying investment until a later date. It first presents the original deterministic model by Fudenberg and Tirole (1985) to analyze preemption versus cooperation. It then extends this in more complex settings to account for stochastic market uncertainty. It discusses the option to invest in a new market and the option to expand an existing market. Throughout the chapter, the impact of firm asymmetry on the equilibrium investment behavior of firms is considered.Less
This chapter examines preemptive investments and the possibility of tacit collusion among firms, delaying investment until a later date. It first presents the original deterministic model by Fudenberg and Tirole (1985) to analyze preemption versus cooperation. It then extends this in more complex settings to account for stochastic market uncertainty. It discusses the option to invest in a new market and the option to expand an existing market. Throughout the chapter, the impact of firm asymmetry on the equilibrium investment behavior of firms is considered.
MELISSA WALKER
- Published in print:
- 2006
- Published Online:
- September 2011
- ISBN:
- 9780813124094
- eISBN:
- 9780813134789
- Item type:
- chapter
- Publisher:
- University Press of Kentucky
- DOI:
- 10.5810/kentucky/9780813124094.003.0004
- Subject:
- History, Cultural History
This chapter examines rural people's recollection of the nature of the rural transformation in the American South and its impact on their daily farm work. It suggests that though rural southerners ...
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This chapter examines rural people's recollection of the nature of the rural transformation in the American South and its impact on their daily farm work. It suggests that though rural southerners shared a community of memory, their accounts of transformation varied widely by gender, race, class, and especially generation. The pre-war generation grew up believing that farming was a means of making a living and the major transforming force for them was farm mechanization. For the post-war generation, the major challenges include weather and domestic market uncertainties, rapid technological change, and competition from global markets.Less
This chapter examines rural people's recollection of the nature of the rural transformation in the American South and its impact on their daily farm work. It suggests that though rural southerners shared a community of memory, their accounts of transformation varied widely by gender, race, class, and especially generation. The pre-war generation grew up believing that farming was a means of making a living and the major transforming force for them was farm mechanization. For the post-war generation, the major challenges include weather and domestic market uncertainties, rapid technological change, and competition from global markets.
