Strategic Investment Under Uncertainty: A Synthesis

38 Pages Posted: 29 Jan 2010 Last revised: 24 Jun 2012

See all articles by Benoit Chevalier-Roignant

Benoit Chevalier-Roignant

Cranfield School of Management

Christoph M. Flath

Karlsruhe Institute of Technology

Arnd Huchzermeier

WHU - Otto Beisheim School of Management

Lenos Trigeorgis

University of Cyprus - Department of Public and Business Administration; King's College London; Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: November 16, 2010

Abstract

Research contributions providing insights at the intersection of real options analysis and industrial organization have become numerous in the recent decade. In the present paper, we provide an overview aimed at categorizing and relating these research streams. We highlight managerial insights about the type of competitive reaction, the manner in which information is revealed, the nature of the competitive advantage (first vs. second-mover advantage), firm heterogeneity, capital divisibility, and the number of competing firms.

Keywords: Finance, Investment under uncertainty, Real options, Strategic investment, Option games.

JEL Classification: G31, C73, L1

Suggested Citation

Chevalier-Roignant, Benoit and Flath, Christoph M. and Huchzermeier, Arnd and Trigeorgis, Lenos, Strategic Investment Under Uncertainty: A Synthesis (November 16, 2010). Available at SSRN: https://ssrn.com/abstract=1543763 or http://dx.doi.org/10.2139/ssrn.1543763

Benoit Chevalier-Roignant (Contact Author)

Cranfield School of Management ( email )

Cranfield
Bedfordshire MK43 OAL, MK43 0AL
United Kingdom

Christoph M. Flath

Karlsruhe Institute of Technology ( email )

Kaiserstraße 12
Karlsruhe, Baden Württemberg 76131
Germany

Arnd Huchzermeier

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany
+49-261-6509380 (Phone)
+49-261-6509389 (Fax)

HOME PAGE: http://www.whu.edu/prod

Lenos Trigeorgis

University of Cyprus - Department of Public and Business Administration ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia CY-1678
Cyprus
00357 2 338762 (Phone)
00357 2 339063 (Fax)

King's College London ( email )

Strand
London, WC2R 2LS
United Kingdom

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave. E62-663
Cambridge, MA 02142
United States

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