Firms` Strategic Decisions: Theoretical and Empirical Findings

Volume: 1

Strategic Investment Decisions in a Continuous- Time Dynamic Model with Complementary Goods

Author(s): Kazuhiro Ohnishi

Pp: 88-97 (10)

DOI: 10.2174/9781681080383115010009

* (Excluding Mailing and Handling)


This chapter considers a continuous-time infinite-horizon duopoly model with complementary products. The chapter investigates the optimal level of labour investment by duopoly firms in a new complementary product industry. Based on the analysis of the model, it is shown that there exist multiple perfect equilibrium outcomes where both firms invest beyond their steady-state reaction curves.

Keywords: Complementary goods, continuous-time dynamic model, earlystopping equilibrium, labour investment, late-stopping equilibrium, noncooperative game, perfect equilibrium, steady-state reaction curves, strategic complementarity, strategic investment decisions.

Related Books
© 2024 Bentham Science Publishers | Privacy Policy