Kreps-Dougherty Framework

The Kreps-Dougherty Framework is a theoretical model in economics that analyzes how companies make decisions under uncertainty, especially regarding investments and strategic interactions. It considers how firms evaluate potential risks and rewards, balancing immediate costs against future benefits, to choose optimal strategies. The framework incorporates factors like market competition, technological change, and information availability, helping to explain how businesses adapt their plans over time in complex environments. Essentially, it provides a structured way to understand the decision-making processes firms use when facing uncertain or dynamic market conditions.