Multi-Equilibrium Solutions in Game-Control Problems of Timing

The paper addresses the issue of optimal investments in innovations.As an example, investments in the constructionof gas pipelines are considered.Rational decisions in choosing the commercialization times (stopping times) can be associated with Nash equilibria in a game between the projects. In this game, the total benefits gained during the pipelines' life periods act as payoffs and commercialization times as strategies. The goal of this paper is to characterize multiequilibria in the game of timing. A key point in the analysis is the observation that all player's best response commercialization times concentrate at two instants. This reduces decisionmaking to choosing between two fixed investment policies, fast and slow. A description of a computational algorithm that finds all the Nash equilibria composed of fast and slow scenarios concludes the paper.