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Strategic Capacity Investment under Uncertainty with Volume Flexibility

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  • Wen, Xingang

    (Tilburg University, Center For Economic Research)

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  • Wen, Xingang, 2017. "Strategic Capacity Investment under Uncertainty with Volume Flexibility," Discussion Paper 2017-019, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:faac3b9c-776e-4b90-a431-2e26d8f6d52e
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    File URL: https://pure.uvt.nl/ws/portalfiles/portal/15910610/2017_019.pdf
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    1. David Besanko & Ulrich Doraszelski, 2004. "Capacity Dynamics and Endogenous Asymmetries in Firm Size," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 23-49, Spring.
    2. Kuno J.M. Huisman & Peter M. Kort, 2015. "Strategic capacity investment under uncertainty," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 376-408, June.
    3. Reynolds, Stanley S. & Wilson, Bart J., 2000. "Bertrand-Edgeworth Competition, Demand Uncertainty, and Asymmetric Outcomes," Journal of Economic Theory, Elsevier, vol. 92(1), pages 122-141, May.
    4. Gal-Or, Esther, 1985. "First Mover and Second Mover Advantages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 649-653, October.
    5. Dixit, Avinash, 1980. "The Role of Investment in Entry-Deterrence," Economic Journal, Royal Economic Society, vol. 90(357), pages 95-106, March.
    6. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    7. Pindyck, Robert S, 1988. "Irreversible Investment, Capacity Choice, and the Value of the Firm," American Economic Review, American Economic Association, vol. 78(5), pages 969-985, December.
    8. Donald Gerwin, 1993. "Manufacturing Flexibility: A Strategic Perspective," Management Science, INFORMS, vol. 39(4), pages 395-410, April.
    9. David Besanko & Ulrich Doraszelski & Lauren Xiaoyuan Lu & Mark Satterthwaite, 2010. "Lumpy Capacity Investment and Disinvestment Dynamics," Operations Research, INFORMS, vol. 58(4-part-2), pages 1178-1193, August.
    10. Manu Goyal & Serguei Netessine, 2011. "Volume Flexibility, Product Flexibility, or Both: The Role of Demand Correlation and Product Substitution," Manufacturing & Service Operations Management, INFORMS, vol. 13(2), pages 180-193, March.
    11. Ravi Anupindi & Li Jiang, 2008. "Capacity Investment Under Postponement Strategies, Market Competition, and Demand Uncertainty," Management Science, INFORMS, vol. 54(11), pages 1876-1890, November.
    12. Beach, R. & Muhlemann, A. P. & Price, D. H. R. & Paterson, A. & Sharp, J. A., 2000. "A review of manufacturing flexibility," European Journal of Operational Research, Elsevier, vol. 122(1), pages 41-57, April.
    13. Xingang Wen & Peter M. Kort & Dolf Talman, 2017. "Volume flexibility and capacity investment: a real options approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(12), pages 1633-1646, December.
    14. Dangl, Thomas, 1999. "Investment and capacity choice under uncertain demand," European Journal of Operational Research, Elsevier, vol. 117(3), pages 415-428, September.
    15. A. Michael Spence, 1977. "Entry, Capacity, Investment and Oligopolistic Pricing," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 534-544, Autumn.
    16. Reynolds, Stanley S, 1987. "Capacity Investment, Preemption and Commitment in an Infinite Horizon Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 69-88, February.
    17. Eric S. Maskin, 1999. "Uncertainty and entry deterrence," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(2), pages 429-437.
    18. Hagspiel, Verena & Huisman, Kuno J.M. & Kort, Peter M., 2016. "Volume flexibility and capacity investment under demand uncertainty," International Journal of Production Economics, Elsevier, vol. 178(C), pages 95-108.
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    Keywords

    Investment under Uncertainty; volume flexibility; entry deterrence/accommodation; Capacity Choice; Duopoly;
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