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| Author: | Sparla, T. |
| Title: | Closure options in a duopoly with strong strategic externalities |
| Journal: | Zeitschrift für Betriebswirtschaft
2004 : VOL. 74:3, Ergänzungsheft, p. 125-155 |
| Index terms: | duopoly strategy externalities models |
| Freeterms: | closure options |
| Language: | eng |
| Abstract: | This paper examines exercise policies for closure options in a duopoly (hereafter as: d-ply.) with uncertain (inverse) demand and strong strategic externalities (here as: str-exts). First, considered is a symmetric d-ply. and the resulting equilibrium (here as: equl./equla.) exercise policies are contrasted with the disinvestment behaviour of a monopoly and of myopic firms. Second, derived are the equla. of the asymmetric d-ply. model. It is shown that the level of the demand uncertainty may affect the number of prevailing equla. Finally, discussed are the two main results: a. duopolists disinvest later than a monopolist and earlier than myopic firms and b. an increase in market price volatility makes str-exts. less important. |
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