We formulate a multi-factor real option duopoly game model to determine the optimal times to divest the incumbent technology or to switch to a new smaller-scale and lower operating cost technology, with an uncertain output price, and declining output. The formulation takes two alternative forms:...

By mixing concepts from both game theoretic analysis and real options theory, an investment decision in a competitive market can be seen as a "game" between firms, as firms implicitly take into account other firms' reactions to their own investment actions. We review two decades of real option...

We develop a model for determining the optimal timing and capacity choice of investment under floors and ceilings (collars). We study how a welfare maximizing finite-lived collar can be optimally designed. Our findings show that for a linear demand function, multiple collar arrangements are...