This paper generalizes the theory of irreversible investment under uncertainty by allowing for risk averse investors in … aversion to examine the e ects of risk aversion, price uncertainty, and other parameters on the optimal investment decision ….We nd that risk aversion reduces investment, particularly if the investment size is large.Moreover, we nd that a rise in …

-weighted approximate replication of the economic risk variables using the investment opportunity set, as opposed to the unweighted hedging …