||This thesis examines strategic investment games between two asymmetric in-vestors who hold an option to invest in a two-stage sequential project with com-plete information between them. In the first stage, the investors compete to obtain a patent that gives its holder an option to proceed to the second stage. We study both the case where the invention is bought from a third party, or the case where the two investors engage in the research and development them-selves. The latter stage consists of the commercialization of the invention and the uncertainty of revenue flows afterwards. The real options framework, which is utilized to optimize investment under uncertainty, is combined with game the-oretic concepts that drive the interactions between the two firms. We investigate the conditions under which preemptive behavior is likely to occur. It is found that the incentive for preemption is strong when the expected time of completion of the research stage is short for both parties, or when the revenue volatility is high.