Strategic investment under uncertainty: A synthesis

Investment is a central theme in economics, finance, and operational research. Traditionally, the focus of analysis has been either on assessing the value of flexibility (investment under uncertainty) or on describing commitment effects in competitive settings (industrial organization). Research contributions addressing the intersection of investment under uncertainty and industrial organization have become numerous in recent years. In this paper, we provide an overview aimed at categorizing and relating these research streams. We highlight managerial insights concerning the nature of competitive advantage (first‐ versus second‐mover advantage), the manner in which information is revealed, firm heterogeneity, capital increment size, and the number of competing firms.