به امید دیدار
سعید

Since you are referring to a monopolist (or close to monopolist) producer and its capacity expansion options I wonder that how your model takes into consideration some weak signals regarding future technological breakthroughs such as microbes that maybe able to "unlock the vast amount of energy trapped in the world's unrecoverable heavy oil deposits." (see below)

http://www.ncl.ac.uk/press.office/press.release/content.phtml?ref=1209472719

Or that the future fuel could be a bizarre kind of gasoline produced from fatty acids of bacteria, plants, and animals. (see below)

http://www.technologyreview.com/read_article.aspx?id=19128&ch=specialsections&sc=biofuels&pg=1

Putting technical and economic challenges aside, I think one cannot underestimate the impact of politics and security problems. For instance, I remember that in a meeting a former top official in the Petroleum Ministry told me that with regard to common oil and gas reserves we have not yet in place a regional agreement or organization to solve disputes both at North (The Caspian Sea) and South (The Persian Gulf) of Iran. Right now, in his words, "the rules of jungle prevail because of the hegemonic and heavy military presence of the US in the region. All Arabs are stealing our common oil reserves, particularly gas, I mean Qatar, which has already permitted the US to build the Gulf command military base in it. In spite of years of attempting by the ministry of foreign affairs we have not been able to establish a regional organization to prepare and sign mutual agreements to peacefully solve disputes over common reserves, for example, Forouzan field vs. Saudi Arabia, Nosrat Field vs. UAE, Arash Field vs. Kuwait, etc." Does your model show the impact of the existence of common reserves on optimal production rates? You can imagine that if the US hegemony assumption is violated and out of the equation then production will decrease significantly because there will be no crazy race to finish up all the common reserves!

Also, I am interested to know how your analysis and model would differ in case that the producer even consider an exit option. I mean do we need to add a game theoretic dynamic too between the incumbent versus the prospective entrant. For instance, Abraham L. Wickelgren points out that:

"When exit is possible and the incumbent plays a mixed exit strategy, the effectiveness of an entry deterrence action depends only on how it affects the incumbent's profits, not the entrant's.The reason for this is when the incumbent plays a mixed strategy, the dominant effect on the entrant's expected profits is the probably that it will be a monopolist. The more profitable the incumbent is, the less likely it will exit, which make entry less profitable. On the other hand, reducing the entrant's duopoly profits only means that the incumbent's expected competition is tougher, reducing its expected duopoly profits and increasing its probability of exit. In equilibrium, these two effects exactly cancel, leading to no net effect on the expected probability of entry."

Does your model have any clues as to whether the capacity expansion will contribute to an entry deterrence strategy by choosing a mixed exit strategy or instead the producer would choose a pure (preplanned) no-exit strategy?