"Despite widespread application of real options theory in the literature, the extent to which firms actually delay … future oil price volatility derived from the NYMEX futures options market. Using a dynamic model of firms' investment problem … magnitude consistent with the optimal response prescribed by theory"--National Bureau of Economic Research web site …

"An important class of investment decisions is characterized by unrecoverable sunk costs, resolution of uncertainty … guidance in such settings, including an investment decision rule called the "bad news principle": the downside investment state … influences the investment decision whereas the upside investment state is ignored. This study takes a new approach to examining …