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This paper presents a new method for estimating discrete games based on bounds of conditional choice probabilities. The method does not require solving the game and is scalable to models with many firms and many discrete decisions. We apply the method to study merger effects on firm entry and...
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This paper explores the rationality of non-strategic entry decisions. I develop a model where firms commit to being strategic or non-strategic before making their simultaneous entry decisions. My analysis shows that commitment to non-strategic entry behavior can be rationalized. Furthermore, the...
Persistent link: https://www.econbiz.de/10014255473
We present a continuous-time real options game in which two firms must decide at each instant of time whether to be in or out of a market that expands up to a random maturity date and contracts thereafter. Firms differ only in the opportunity costs of usage of the assets they employ (e.g., owing...
Persistent link: https://www.econbiz.de/10014073531
We analyse the entry decisions of competing firms in a two-player stochastic real option game, when rivals can exert different but correlated uncertain profitabilities from operating. In the presence of entry costs, decision thresholds exhibit hysteresis, the range of which is decreasing in the...
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This paper discusses the economic merits of direct or indirect governmental support for open source projects. Software … differences between proprietary software and open source software with respect to these market features and ask whether open … source as an alternative to proprietary software can mitigate these problems. Then we discuss the implications of various …
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