Investment in Competitive Equilibrium: The Optimality of Myopic Behavior
There is an extensive literature on the optimal irreversible investment strategy of a solitary firm facing an exogenous price process. This paper shows that the investment strategies that this literature derives may be optimal in competitive equilibrium even though the price process is now endogenous. This provides a simple means for computing equilibrium in investment strategies. Copyright 1993, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Volume (Year): 108 (1993)
Issue (Month): 4 (November)
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