Duopolistic competition under risk aversion and uncertainty

• Main Authors: CHRONOPOULOS, Michail, DE REYCK, Bert, SIDDIQUI, Afzal
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: Investment analysis; Real options; Competition; Risk aversion; Business Administration, Management, and Operations
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6758; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7746/viewcontent/Duopolistic_competition_under_risk_aversion_and_uncertainty.pdf
• Institution: Singapore Management University

A monopolist typically defers entry into an industry as both price uncertainty and the level of risk aversion increase. By contrast, the presence of a rival typically hastens entry under risk neutrality. Here, we examine these two opposing effects in a duopoly setting. We demonstrate that the value...