Research On The Investment Strategy Of Technological Innovation Of Oligopoly In Oligopoly Market

The enterprise is the Micro-foundation of the national economy, whose development and growth ensures the growth of a country and enhanced the economic strength. The technology innovation is the main source of the core competitiveness of an enterprise, and it decides whether the enterprise take an advantage in the fierce market competition. Investment to technology innovation projects has the features of highly uncertainty, irreversibility and competitiveness. When we use the traditional method to evaluate the investment for technology innovation, we usually underestimate or overestimate its value. There are Deferred Options, Expanded Options, and Abandonment Options in investment to technology innovation projects. The same project is owned by several enterprises in oligopoly market, and the share of the project will lead to competition. Thus, the corporate investment decision-making not only has the options features, but also the game features. This game features weak the value of flexible in investment options and change the outcome of the investment decision-making. The options and games theory combines the real option theory and game theory to study the investment to technology innovation projects under uncertainty. The theory considers both the flexibility of the investment decision-making and the reaction of the competitors. Thus, the theory provides a scientific analysis of the decision-making.This dissertation is divided into eight chapters. In the preface, the structure, contents, methods of research and innovation of this dissertation are introduced on base of the introduction of options game theory at home and abroad at present. The innovation is a conclusion that the companies will invest in advance when the costs of investment gradually become smaller, considering of the characteristics of technological innovation investment projects. Chapter II deals with relevant theory in this dissertation, including the theory of oligopoly markets, technological innovation, options, real options and game theory. Chapter III focused on the traditional decision-making methods of investment by analyzing their advantages and disadvantages. Chapter IV introduces the concept and characteristics of technological innovation investment projects, mainly concentrating in the meaning, the roles, characteristics which in feature are options and game theory. Chapter V, as a manual of this dissertation, puts forward the basic framework of options game theory. At the basis of previous studies, Chapter VI comes to the model, value function, and investment margin taking into account the characteristics of technological innovation projects, and analysis investment decisions to changing costs. The chapter seven makes a comparative static analysis. The last chapter is the conclusions and outlooks.The model of the paper is based on the foundation of the model of Dixit&Pindyck (1994) and the model of Qiu Wan-hua&Yu Dong-ping, combined with the features of technological innovation to study. The study has shown that the enterprise will act in advance rather than defer their investment because of the reduction of investment costs.