Technological Competition, Uncertainty, and Oligopoly

In an oligopoly context the present technological choice of a firm which expects to receive private revelant information just prior to the uncertain market stage has both a flexibility value and a strategic commitmenr value. In contrast to some common wisdom ideas we provide a natural two-stage competition framework in which an increase in uncertainty always raises the commitment value of the technological choice of the firm and may decrease its flexibility value when the increased uncertainty takes the form of more variable beliefs. The first result tends to reinforce therefore the findings of the strategic commitment literature under certainty. Journal @‘Economic Literature Classification Numbers: 026, 621. 1%~ 1989