Duopolistic competition under risk aversion and uncertainty
We develop an investment framework under uncertainty, competition, and risk aversion. The pre-emptive leaders loss due to the follower is unaffected by risk aversion. The non-pre-emptive leader is relatively better off with greater risk aversion. Uncertainty reduces the loss of the pre-emptive leader relative to the monopolist. The non-pre-emptive leader may become worse off with greater uncertainty.
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