INVESTMENT IN COMPETITIVE-EQUILIBRIUM - THE OPTIMALITY OF MYOPIC BEHAVIOR

Authors
LEAHY JV
Citation
Jv. Leahy, INVESTMENT IN COMPETITIVE-EQUILIBRIUM - THE OPTIMALITY OF MYOPIC BEHAVIOR, The Quarterly journal of economics, 108(4), 1993, pp. 1105-1133
Citations number
27
Categorie Soggetti
Economics
Journal title
The Quarterly journal of economics → ACNP
ISSN journal
00335533
Volume
108
Issue
4
Year of publication
1993
Pages
1105 - 1133
Database
ISI
SICI code
0033-5533(1993)108:4<1105:IIC-TO>2.0.ZU;2-0
Abstract
There is an extensive literature on the optimal irreversible investmen t strategy of a solitary firm facing an exogenous price process. This paper shows that the investment strategies that this literature derive s may be optimal in competitive equilibrium even though the price proc ess is now endogenous. This provides a simple means for computing equi librium investment strategies.