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Optimal R&D Investment Strategies with Quantity Competition under the Threat of Superior Entry
Lukach, Ruslan; Kort, Peter M.; Plasmans, Joseph - CESifo - 2005
technical uncertainty. We distinguish four scenarios: inevitable entry, entry deterrence, entry blockade, and non-credible entry … technical uncertainty stimulates starting R&D and can result in implementation of more expensive research projects. The welfare … analysis shows that the relation between welfare and entry cost and between welfare and uncertainty is non-monotonic. …
Persistent link: https://www.econbiz.de/10005181419
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Explosive Oil Prices
Gronwald, Marc - CESifo - 2013
This paper deals with three aspects of spectacular oil price episodes such as the one witnessed in 2008. First, the concept of temporary explosiveness is proposed as an empirical method for capturing this type of behavior. The application of a recently proposed recursive unit root test shows...
Persistent link: https://www.econbiz.de/10010877773
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Booms, Recessions and Financial Turmoil: A Fresh Look at Investment Decisions under Cyclical Uncertainty
Chen, Yu-Fu; Funke, Michael - CESifo - 2009
The paper studies the interaction between cyclical uncertainty and investment in a stochastic real option framework … of the link between cyclical uncertainty and investment is quantified using simulations of the model. The chief …
Persistent link: https://www.econbiz.de/10005013955
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Working Time and Employment under Uncertainty
Chen, Yu-Fu; Funke, Michael - CESifo - 2002
impact of uncertainty and real options on the decision of working time, i.e. we examines the determinants of employment and …
Persistent link: https://www.econbiz.de/10005051593
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Behavioral Political Economy: A Survey
Schnellenbach, Jan; Schubert, Christian - CESifo - 2014
Explaining individual behavior in politics should rely on the same motivational assumptions as explaining behavior in the market: That’s what Political Economy, understood as the application of economics to the study of political processes, is all about. In its standard variant, those who...
Persistent link: https://www.econbiz.de/10010948848
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Investing in Biogas: Timing, Technological Choice and the Value of Flexibility from Inputs Mix
Corato, Luca Di; Moretto, Michele - CESifo - 2009
In a continuous-time framework we study the technology and investment choice problem of a continuous co-digestion biogas plant dealing with randomly fluctuating relative convenience of input factor costs. Input factors enter into the productive process together mixed according to a given initial...
Persistent link: https://www.econbiz.de/10005013066
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Dark Clouds or Silver Linings? Knightian Uncertainty and Climate Change
Chen, Yu-Fu; Funke, Michael; Glanemann, Nicole - CESifo - 2011
This paper examines the impact of Knightian uncertainty upon optimal climate policy through the prism of a continuous … Knightian uncertainty accelerates climate policy, i.e. policymakers become more reluctant to postpone the timing of climate …
Persistent link: https://www.econbiz.de/10009221550
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Product Market Competition, Investment and Employment-Abundant versus Job-Poor Growth: A Real Options Perspective
Chen, Yu-Fu; Funke, Michael - CESifo - 2005
The role of product market reforms in achieving the objective of higher employment and growth has recently received much attention amongst academics. The aim of this paper is to analyse some of the channels through which cross-market effects come about and to assess their policy relevance. The...
Persistent link: https://www.econbiz.de/10005766293
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Global Warming and Extreme Events: Rethinking the Timing and Intensity of Environmental Policy
Chen, Yu-Fu; Funke, Michael - CESifo - 2010
The possibility of low-probability extreme events has reignited the debate over the optimal intensity and timing of climate policy. In this paper we therefore contribute to the literature by assessing the implications of low-probability extreme events on environmental policy in a continuous-time...
Persistent link: https://www.econbiz.de/10008511618