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R&D Investments with Competitive Interactions
Miltersen, Kristian R. - 2012
In this article we develop a model to analyze patent-protected R&D investment projects when there is (imperfect) competition in the development and marketing of the resulting product. The competitive interactions that occur substantially complicate the solution of the problem since the decision...
Persistent link: https://www.econbiz.de/10013115937
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Real Option Exercise : Empirical Evidence
Décaire, Paul - 2019
We study when and why firms exercise real options. Using detailed project-level investment data, we find that the likelihood that a firm exercises a real option is strongly related to peer exercise behavior. Peer exercise decisions are as important in explaining exercise behavior as variables...
Persistent link: https://www.econbiz.de/10012891314
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Investment Under Uncertainty and Time-Inconsistent Preferences
Grenadier, Steven R.; Wang, Neng - 2021
The real options framework has been used extensively to analyze the timing of investment under uncertainty. While standard real options models assume that agents possess a constant rate of time preference, there is substantial evidence that agents are very impatient about choices in the...
Persistent link: https://www.econbiz.de/10013226097
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The Effectiveness of Life-Preserving Investments in Times of COVID-19
van Binsbergen, Jules H. - 2020
We analyze the effectiveness of preventive investments aimed at increasing agents' life expectancy, with a focus on influenza and COVID-19 mitigation. Maximizing overall life expectancy requires allocating resources across hazards so as to equalize investments' marginal effectiveness. Based on...
Persistent link: https://www.econbiz.de/10012830488
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Real Options with Uncertain Maturity and Competition
Miltersen, Kristian R. - 2010
We develop a new approach to dealing with real options problems with uncertain maturity. This type of situation is typical for Ramp;D investments and mine or oil exploration projects. These types of projects are characterized by significant on-going investment costs until completion. Since time...
Persistent link: https://www.econbiz.de/10012760295
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R & D Activities and the Technology Game : a Dynamic Model of U.S.-Japancompetition
Sato, Ryuzo - 2021
that Japan is not spending much on basic technology development cannot be empirically substantiated from the study of the … technology.The second part of the paper is to show how two countries, one with heavy R&D activities in basic technology (the U ….S.A.)and the other with heavy R&D activities in applied technology(Japan), can compete in the world market with their productivity …
Persistent link: https://www.econbiz.de/10013246392
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Real Options, Taxes and Financial Leverage
Myers, Stewart C. - 2012
We show how the value of a real option depends on corporate income taxes and the option's "debt capacity," defined as the amount of debt supported or displaced by the option. The value of the underlying asset must be an adjusted present value (APV). The risk-free rate of interest must be...
Persistent link: https://www.econbiz.de/10013104988
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Investment Busts, Reputation, and the Temptation to Blend in with the Crowd
Grenadier, Steven R. - 2014
We provide a dynamic model of an industry in which agents strategically time liquidation decisions in an effort to protect their reputations. As in traditional models, agents delay liquidation attempting to signal their quality. However, when the industry faces a common shock that...
Persistent link: https://www.econbiz.de/10013066308
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The Valuation of Fisheries Rights : A Real Options Approach
Pizarro, Jose - 2018
This article develops and implements a Real Option approach to value renewable natural resources in the case of Marine Fisheries. The model includes two sources of uncertainty: the resource biomass and the price of fish, and it can be used by fisheries to optimally adapt their harvesting...
Persistent link: https://www.econbiz.de/10012909855
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Flexible Production and Entry : Institutional, Technological, and Organizational Determinants
Belenzon, Sharon - 2019
Academics, the media, and policymakers have all raised concerns about the implications of human workers being replaced by machines or software. Few have discussed the implications of the reverse: firms' ability to replace capital with workers. We show that this flexibility can help new firms...
Persistent link: https://www.econbiz.de/10012890476