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dc.contributor.authorSendstad, Lars Hegnes
dc.contributor.authorChronopoulos, Michail
dc.identifier.citationJournal of Economic Dynamics and Control. 2020, .en_US
dc.description.abstractFirms devising green investment strategies within a deregulated environment must take into account not only economic and technological uncertainty, but also strategic interactions due to competition. Also, further complicating green investment decisions is the fact that firms are likely to exhibit risk aversion, since alternative energy technologies entail risk that cannot be diversified. Therefore, we develop a utility-based, real options framework for pre-emptive and non-pre-emptive competition in order to analyse how economic and technological uncertainty interact with risk aversion to impact the adoption of an existing technology in the light of uncertainty over the arrival of an improved version. We confirm that greater risk aversion delays investment and show that technological uncertainty accelerates the follower’s entry, delays the entry of the pre-emptive leader, and, intriguingly, does not affect the non-pre-emptive leader’s investment decision. Also, we show how the relative loss in the leader’s value due to the follower’s entry is affected by economic and technological uncertainty as well as risk aversion, and how the risk of preemption under increasing economic uncertainty raises the value of direct investment in the new technology relative to stepwise investment.en_US
dc.rightsNavngivelse 4.0 Internasjonal*
dc.titleStrategic technology switching under risk aversion and uncertaintyen_US
dc.typePeer revieweden_US
dc.typeJournal articleen_US
dc.source.journalJournal of Economic Dynamics and Controlen_US
dc.description.localcode© 2020 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (

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Navngivelse 4.0 Internasjonal
Except where otherwise noted, this item's license is described as Navngivelse 4.0 Internasjonal