Strategic investment in technological innovations

Abstract The aim of this paper is to determine the optimal timing of technology investment of a single firm in a duopoly framework. As time passes different technologies are invented which after sometime become available for the firm to adopt. The question here is not only when a firm should invest but also which technology should be adopted. For different scenarios the optimal technology investment decision is determined. Outcomes range from pre-emption equilibria to equilibria with second mover advantages.

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