@inproceedings{Carlson2010Leaders,
abstract = {We study own and rival risk in a dynamic duopoly with a homogeneous output good. A competitor's options to adjust capacity reduce own-firm risk through a simple hedging channel. For example, if a rival possesses a growth option, an increase in industry demand directly enhances current profits but also encourages value-reducing competitor expansion. As a consequence, when a leader and a follower emerge in equilibrium, risk dynamics depart substantially from previously-studied simultaneous move benchmarks. Own-firm and competitor required returns tend to move together through contractions and oppositely during expansions, providing testable new empirical predictions.},
address = {Frankfurt a. M.},
author = {Murray Carlson and Engelbert Dockner and Adlai Fisher and Ron Giammarino},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {G31; D43; D92; 330; Growth options and industry risk; asset pricing and investment decisions; risk dynamics in oligopolistic industries},
language = {eng},
number = {D8-V2},
publisher = {Verein f\"{u}r Socialpolitik},
series = {Beitr\"{a}ge zur Jahrestagung des Vereins f\"{u}r Socialpolitik 2010: \"{O}konomie der Familie - Session: Dynamic Models of Investment},
title = {Leaders, Followers, and Risk Dynamics in Industry Equilibrium},
url = {http://hdl.handle.net/10419/37484},
year = {2010}
}
