Strategic accessibility competition

Bacchiega, Emanuele; Randon, Emanuela; Zirulia, Lorenzo

doi:10.1016/j.rie.2011.12.001

Cited by 2 publications

(3 citation statements)

References 30 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Companies that do so must believe the cost of postponing the investment is greater than the value abandoned from initial exercise (Bacchiega et al 2012;Briglauer et al 2013;Koetter and Noth 2013). In summary, under the NPV, companies do not see the value of waiting, while under the options theory; the value of waiting is engaged but overestimated because of the lack of competition.…”

Section: Insightsmentioning

confidence: 98%

Combination of real options and game-theoretic approach in investment analysis

Arasteh

2016

J Ind Eng Int

View full text Add to dashboard Cite

Investments in technology create a large amount of capital investments by major companies. Assessing such investment projects is identified as critical to the efficient assignment of resources. Viewing investment projects as real options, this paper expands a method for assessing technology investment decisions in the linkage existence of uncertainty and competition. It combines the game-theoretic models of strategic market interactions with a real options approach. Several key characteristics underlie the model. First, our study shows how investment strategies rely on competitive interactions. Under the force of competition, firms hurry to exercise their options early. The resulting ''hurry equilibrium'' destroys the option value of waiting and involves violent investment behavior. Second, we get best investment policies and critical investment entrances. This suggests that integrating will be unavoidable in some information product markets. The model creates some new intuitions into the forces that shape market behavior as noticed in the information technology industry. It can be used to specify best investment policies for technology innovations and adoptions, multistage R&D, and investment projects in information technology.

show abstract

Section: Insightsmentioning

confidence: 98%

Combination of real options and game-theoretic approach in investment analysis

Arasteh

2016

J Ind Eng Int

View full text Add to dashboard Cite

show abstract

“…We investigate a two-stage game in which the manufacturer first chooses its strategy, before the retailers compete with each other. 3 Our model is closely related to that in Chiang, Chhajed and Hess (2003). They use the vertical differentiation approach to develop a model that incorporates products of different qualityà la Mussa and Rosen (1978).…”

Section: Introductionmentioning

confidence: 99%

“…They show that a monopoly manufacturer can increase their profit by intentionally damaging a high-quality product to produce a low-quality counterpart even if the marginal cost of the latter is higher than that of the former. 3 The horizontal differentiation approachà la Hotelling (1929) has also been used in the literature of industrial organization and marketing science. See Matsushima (2004), Coughlan and Soberman (2005), and Ishibashi and Matsushima (2009) for example.…”

Section: Introductionmentioning

confidence: 99%

Opening a Direct Digital Channel: The Impact of Versioning on the Physical Product Market With Heterogeneous Retailers

Nakayama

2018

GMFC

View full text Add to dashboard Cite

In this paper, we construct a vertical differentiation model comprising an upstream manufacturer and two downstream retailers with cost asymmetry. In this model, the manufacturer not only produces a physical product it sells to the downstream retailers, but also has an option of "versioning" to open a new direct channel for an alternate digital product. We find that the direct digital channel may reduce the quantity of the physical product sold by the inefficient retailer even if it increases total quantity. It may also increase the quantity of the physical product sold by the efficient retailer even if it reduces total quantity. Cost asymmetry across the retailers plays a role in these results. Moreover, under certain conditions related to the manufacturer's cost and if the quality of the digital product is sufficiently low, then the manufacturer raises the wholesale price of the physical product and ceases to deal with the inefficient retailer, thereby eliminating retail competition, which may raise its retail price. This lowers the welfare of consumers who continue to purchase the physical product after the new digital product comes onto the market.

show abstract

Strategic accessibility competition

Cited by 2 publications

References 30 publications

Combination of real options and game-theoretic approach in investment analysis

Combination of real options and game-theoretic approach in investment analysis

Opening a Direct Digital Channel: The Impact of Versioning on the Physical Product Market With Heterogeneous Retailers

Contact Info

Product

Resources

About