Abstract
In this paper we develop a valuation model when there exist two competitive firms that face irreversible investment decisions under the demand uncertainty. We propose a numerical procedure to derive both project values and equilibrium strategies in the duopolistic environment. In numerical examples we consider two different economic conditions, which are labelled first mover advantage and second mover advantage, and examine the effects of these conditions on the equilibrium strategies as well as the project values. We show that these conditions cause significant changes in the equilibrium strategies of both firms.
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