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Strategic Investment with Three Asymmetric Firms

In: Recent Advances In Financial Engineering 2011

Author

Listed:
  • Sunyoung Ko

    (Graduate School of Social Sciences, Tokyo Metropolitan University, 1-1 Minami-Osawa, Hachioji, Tokyo 192-0397, Japan)

  • Takashi Shibata

    (Graduate School of Social Sciences, Tokyo Metropolitan University, 1-1 Minami-Osawa, Hachioji, Tokyo 192-0397, Japan)

Abstract

This paper examines the strategic investment timing problem in the case of three firms with different cost structures. We extend the strategic investment timing problem by allowing the number of asymmetric firms to range from two to three. Surprisingly, we show that the firm with the lowest cost structure is not always the first investor in the investment timing problem with three asymmetric firms. The mechanism of strategies in the case with three asymmetric firms is quite different from that with two asymmetric firms.

Suggested Citation

  • Sunyoung Ko & Takashi Shibata, 2012. "Strategic Investment with Three Asymmetric Firms," World Scientific Book Chapters, in: Akihiko Takahashi & Yukio Muromachi & Hidetaka Nakaoka (ed.), Recent Advances In Financial Engineering 2011, chapter 6, pages 97-110, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814407335_0006
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    Cited by:

    1. Matros, Alexander & Smirnov, Vladimir & Wait, Andrew, 2021. "Sunk costs, entry and clustering," Working Papers 2021-11, University of Sydney, School of Economics, revised Jan 2024.
    2. Shibata, Takashi, 2016. "Strategic entry in a triopoly market of firms with asymmetric cost structures," European Journal of Operational Research, Elsevier, vol. 249(2), pages 728-739.

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