) competition in the development and marketing of the resulting product. The competitive interactions that occur substantially … these interactions. Implementation of the model shows that competition in R&D, in general, not only increases production and …

value (APV). The risk-free rate of interest must be after-tax. Debt capacity depends on the APV and target debt ratio for … the underlying asset, on the option delta and on the amount of risk-free borrowing or lending that would be needed for … follow the tradeoff theory of capital structure will be lower than target ratios for assets in place. Our results can …

This paper examines distortions in corporate investment decisions when a new project changes firm risk. It presents a … dynamic model in which a self-interested, risk-averse manager makes investment decisions at a levered firm. The model … factors in this decision are the expected changes in the values of future tax shields and bankruptcy costs when firm risk …

between idiosyncratic risk and development. These results support models in which competition erodes option values and provide …We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a … idiosyncratic and systematic risk lead developers to delay new real estate investments. Empirically, a one-standard deviation …

standard corporate savings models, a financially constrained firm may behave in a risk seeking sense (and thus firm value may …

from early entrants to followers. We develop a tractable stochastic duopoly entry game with a second-mover advantage. We … entry opposite to the predictions that competition causes firms to equalize rents (Fudenberg and Tirole, 1985) by exercising …-strategy and pure-strategy equilibria. We develop a separation principle that a.) decomposes the duopoly game into a monopolist …

. When the agent can trade the market portfolio to partially hedge against investment risk, the systematic volatility is … investment payoff is a series of flows, the agent's idiosyncratic risk exposure alters both the implied option value and the …