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Entry-exit decisions with implementation delay under uncertainty  [PDF]
Yong-Chao Zhang
Mathematics , 2015,
Abstract: We employ a natural method from the perspective of the optimal stopping theory to analyze entry-exit decisions with implementation delay of a project, and provide closed expressions for optimal entry decision times, optimal exit decision times and the maximal expected present value from the project. The results in conventional research were obtained under the restriction that the sum of the entry cost and the exit cost is nonnegative. In practice, we usually meet this sum is negative, so it is necessary to remove the restriction. If the sum is negative, there may exist two price triggers of entry decision, which does not happen when the sum is nonnegative, and it is not optimal to enter and then immediately exit the project even though it is an arbitrage opportunity.
Hedging entry and exit decisions: activating and deactivating barrier options  [PDF]
Laurent Gauthier
Advances in Decision Sciences , 2002, DOI: 10.1155/s1173912602000044
Abstract: Abstract. Investment projects and businesses can be entered or exited at a cost, and the theory of real option teaches us how to find optimal activity levels that should trigger entry or exit. However, in practice, different managers or owners operate under different constraints and might apply different thresholds to the same business. We are interested in the hedging of the risk related to the cost of sub-optimal entry or exit. We introduce a new class of derivative products that can hedge this risk. The pricing of these derivatives involves the joint law of a Brownian excursion and its supremum, which is calculated thanks to Bessel processes-related distribution laws.
New Approach to Derive the Value Function of a Firm with Exit Option  [PDF]
Manuel Guerra,Cláudia Nunes,Carlos Oliveira
Mathematics , 2013,
Abstract: In this paper we propose a new way of proving the value of a firm that is currently producing a certain product and faces the option to exit the market. The problem of optimal exiting is an optimal stopping problem, that can be solved using the dynamic programming principle. This approach leads to a partial differential equation, called the Hamilton-Jacobi-Bellman equation. This is a free-boundary problem, and therefore, we propose an approximation for the original model. We prove the convergence of the solution of the approximated problem to the original one and finally, using the Implicit Function Theorem, we obtain this solution.
Entry and exit sets in the dynamics of area preserving Henon map  [PDF]
E. Petrisor
Physics , 2002, DOI: 10.1016/S0960-0779(02)00475-7
Abstract: In this paper we study dynamical properties of the area preserving Henon map, as a discrete version of open Hamiltonian systems, that can exhibit chaotic scattering. Exploiting its geometric properties we locate the exit and entry sets, i.e. regions through which any forward, respectively backward, unbounded orbit escapes to infinity. In order to get the boundaries of these sets we prove that the right branch of the unstable manifold of the hyperbolic fixed point is the graph of a function, which is the uniform limit of a sequence of functions whose graphs are arcs of the symmetry lines of the Henon map, as a reversible map.
On Industry Structure and Firm Conduct in Long Run Equilibrium  [cached]
Jean-Paul Chavas
Journal of Management and Strategy , 2010, DOI: 10.5430/jms.v1n1p2
Abstract: This paper presents an analysis of long run equilibrium of industry structure and firm conduct allowing for entry and exit, and cost heterogeneity among firms. It investigates the case of firms’ conduct/markups that emerges as the stationary equilibrium from long run evolutionary selection over time. Treating the number of firms as endogenous provides linkages between firms’ conduct and market structure. The implications of cost structure for market equilibrium price, firms' conduct and industry concentration are investigated. The effects of fixed cost and entry/exit on long run industry equilibrium are examined. The analysis shows how globalization can help reduce the firms’ exercise of market power, increase the responsiveness of aggregate supply, and reduce price sensitivity to shocks. It also shows how neglecting either entry/exit or adjustments in firm conduct underestimates the aggregate effects of globalization.
Build to order and entry/exit strategies under exchange rate uncertainty
Lin Chin-Tsai,Wu Cheng-Ru
Yugoslav Journal of Operations Research , 2004, DOI: 10.2298/yjor0402193l
Abstract: Under uncertainty of exchange rate, we extend the build to order production model of Lin et al. (2002) by considering the export-oriented manufacturer to make decisions to switch production location freely between domestic and foreign ones. The export-oriented manufacturer is risk neutral and has rational expectations. When we transfer the production location from domestic (foreign) to foreign (domestic), and the production location transferring cost and the drift of real exchange rate are both equal to zero, then the optimal entry and exit threshold value of Cobb-Douglas production function are equal, no matter whether we use real options or net present value method. Thus export-oriented manufacturer can make decisions at the optimal transfer threshold value for transferable locations wherever the production locations are. It provides the export-oriented manufacturer with another way of thinking.
The entry-exit function and geometric singular perturbation theory  [PDF]
Peter De Maesschalck,Stephen Schecter
Mathematics , 2015,
Abstract: For small $\epsilon>0$, the system $\dot x = \epsilon$, $\dot z = h(x,z,\epsilon)z$, with $h(x,0,0)<0$ for $x<0$ and $h(x,0,0)>0$ for $x>0$, admits solutions that approach the $x$-axis while $x<0$ and are repelled from it when $x>0$. The limiting attraction and repulsion points are given by the well-known entry-exit function. For $h(x,z,\epsilon)z$ replaced by $h(x,z,\epsilon)z^2$, we explain this phenomenon using geometric singular perturbation theory. We also show that the linear case can be reduced to the quadratic case, and we discuss the smoothness of the return map to the line $z=z_0$, $z_0>0$, in the limit $\epsilon\to0$.
Fishery Fee and Tax Rate in an Oligopoly Industry with Entry and Exit  [PDF]
Yu Shao, Kai Shen, Weiru Zhang, Shuntian Yao
Theoretical Economics Letters (TEL) , 2013, DOI: 10.4236/tel.2013.35A1004
Abstract:

Over the last two decades, fisheries sector has been playing an important role in the global economy as a vibrant sector. By looking into the interactions among natural resources, human beings and government, this paper first briefly examines the issue of complicated conflicts in fisheries together with its influence on fisheries management. Under the assumption that the fishing resources will not be exhausted, this paper further reveals the particular conflicts between economic performance and community welfare by modelling the strategic interaction amongst the government and fishing firms based on the two stage non-cooperative game theory. With a dynamic model enclosed, this paper demonstrates with how the government establishes the fishing fee rate to achieve its primary goal and how the fishing firms react to the policy in each scenario. In the end, it concludes with some brief suggestions regarding policy-making for future work priorities. Although fishery industry is used as an example in this article, our main results, however, can be applied to any industries of oligopoly competitions with entry and exit.

Firm Entry and Productivity Turnovers in Import Substituting Markets: Evidence from the Petrochemical Industry in Colombia
Gutiérrez,Luis H.; Pombo,Carlos;
Lecturas de Economía , 2005,
Abstract: this paper analyses plant entry and productivity turnovers across colombia's petrochemical industry for the 1974-1998 period. results show that successful entrants shaped industry productivity and induced plant restructuring among incumbent plants. entry flows increased steadily within plastics and boosted after trade liberalization. total factor productivity growth decomposition shows that the incumbent effect dominates the turnover effect. econometric results suggest that barriers to entry associated with plant technology licensing and dependence of imported raw materials deter entry while complementary market variables such as industry productivity levels, growth in housing construction, and fringe competition induce firm entry.
Impact of firm-level factors and market entry mode on performance: A study of service MNCs in an emerging economy
George Acheampong,Benard Kumah
Management Science Letters , 2012,
Abstract: The study examined the market entry strategies of multinational services companies into Ghana’s service sector and the linkages to firm level performance after entry. Literature was reviewed on market entry strategies, internationalisation, globalisation of service firms and resource-based theory. The study adopted a combination of both quantitative and qualitative research approaches in this study. The qualitative approach was for deeper enquiry and quantitative for empirical testing. The study found that firm specific factors affect the market entry strategy while the entry strategy also affects performance after it enters the market. Home country factors and the features of services are also seen to moderate on the effects mentioned. Respondents also indicated that the features of services were an industry wide issue not so much consideration is given to it.
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