One New Technology
A feature of the last decade is that firms more and more face competition on their output markets. One reason is the abolition of monopolistic markets created by government. In the Netherlands examples are the opening of the markets for telecommunication, railway and power supply. Another reason is the, still ongoing, process of mergers, which due to legislation will not end with a market with only one supplier. The result is that markets with only one supplier and markets with many suppliers seem to disappear. Thus, in its own investment decision, a firm should take into account the investment behavior by its competitors, which is dealt with in this paper.
KeywordsNash Equilibrium Reaction Function Equilibrium Concept Reaction Curve Technology Investment
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