Entry and Exit Decisions under Uncertainty in a Symmetric Duopoly
نویسندگان
چکیده
In this paper, we analyze entry and exit decisions in a symmetric duopoly setting. The model is based on Dixit (1989), which is a standard model in this area. To incorporate competitive nature into the output price, we use an inverse demand function. We aim to present an equilibrium strategy of entry and exit decisions in a symmetric duopoly. To do so, we consider four states of two firms and pay attention to setting the value-matching and smooth-pasting conditions. As a result, the relation between four optimal thresholds is shown. Moreover, we show that a competitive exit threshold has different characteristics from others.
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تاریخ انتشار 1989