New research reveals optimal timing for investments in monopolies.
The article explores how companies decide when to invest in monopolies with limited lifespans. It looks at cases where a monopoly can end randomly or at a certain time. The study shows that these situations lead to different investment strategies compared to traditional monopoly or duopoly models. In certain-lived monopolies, the leader invests earlier if there's a risk of losing their position, and later if they're guaranteed to be the leader. In random-lived monopolies, investment timing falls between monopoly and duopoly scenarios. Overall, higher uncertainty causes delays in investment across all cases.