One New Technology and Asymmetric Firms
In Nielsen, 1999 and in Chapter 7 it is shown that, in a strategic investment new market model, competition by an identical firm precipitates investment. The purpose of this chapter is to examine the same issue, namely the effect of introducing another firm on the original firm’s investment decision, in an asymmetric setting. We introduce asymmetry by letting the firms have different investment costs, but the methods and results should be extendable to other types of asymmetry as well.
KeywordsInvestment Cost Equilibrium Strategy Positive Externality Technology Investment Timing Game
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