not rely on the “smooth-pasting condition.” An application to MacDonald and Siegel’s canonical investment problem (1986 …) shows that the standard investment threshold over-estimates the optimal threshold when the lower barrier is absorbing and …

small, uncertainty affects investment negatively; (ii) A sufficiently large time lag engenders an inverse u …The effect that investment lags has on the uncertainty-investment relationship is studied by modifying the Bar-Ilan and …-shape relationship between the degree of uncertainty and the profit level that triggers investment; (iii) When such an inverse u- shape …

The role that Bernanke’s Bad News Principle plays in the modern theory of investment under uncertainty is analyzed. The … analysis shows that the actual investment dilemma is that by delaying investment firms trade off a higher present value of … earnings for a lower present value of the investment cost, in contrast to previous interpretations of this dilemma. The …

order conditions for optimizing behavior fail and duality theory fails. When neither curvature nor monotonicity are imposed …

, accountability, transparency, flexibility, and both goal and instrument independence; 2) Theoretical analysis of discrepancies of the …

discrete time approach can be more analytically tractable than the continuous time one, we consider timing of investment with …This paper is an extended version of the paper 'Practical Guide to Real Options in Discrete Time' (http …://econwpa.wustl.edu:80/eps/fin/papers/0405/0405016.pdf), where a general, computationally simple approach to real options in discrete time …

, the strategic value of a joint venture and the value of flexibility that stems from a less than full commitment can be …

The goal of the paper is to study how a menu of options affects decisions of a rational agent facing uncertainty over … which the underlying stochastic variable has to reach in order investment became optimal, but cause the investor to be … inactive even when the cost of investment is vanishing. As a technical contribution, the paper suggests a robust method of …