-going investment costs until completion. Since time to completion is uncertain, the total investment costs will also be uncertain … options at completion (because of fixed final investment costs) we obtain simple closed form solutions. We apply the framework …

of investment requires a new idea, an "option". When options are scarce, new capital is harder to put in place and the … gradually, as options are used up. Because investment represents an exercise of options, it has an intertemporal substitution …

, consumption/savings, and portfolio selection. For a lump-sum investment payoff and an agent with a sufficiently strong … precautionary savings motive, an increase in volatility can accelerate investment, contrary to the standard real options analysis …. When the agent can trade the market portfolio to partially hedge against investment risk, the systematic volatility is …

This paper studies the effect of interest rates on investment in an environment where firms make irreversible … delaying investment. These two forces combine to generate an aggregate investment demand curve that is always a backward …-bending function of the interest rate. At low rates, increasing the interest rate stimulates investment by raising the cost of delay …

We quantify the role of financial factors that have contributed to sluggish investment in Europe in the aftermath of … investment in the aftermath of the crisis can be linked to higher leverage, increased debt service, and having a relationship … with a weak bank--once we condition on aggregate demand shocks. Second, the relation between leverage and investment …

investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit … spreads have a strong effect on investment, irrespective of the level of uncertainty. These findings raise a question … financial shocks. By influencing the effective supply of credit, both types of shocks exert a powerful effect on investment and …

This paper addresses the impact on investment incentives of the network sharing arrangements mandated by the … Telecommunications Act of 1996, with a focus on the implications of irreversible investment. Although the goal is to promote competition … network services, which creates a significant investment disincentive …

-preserving investment …

We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a … increase in the return volatility reduces the probability of investment by 13 percent, equivalent to a 9 percent decline in …

Capital investment decisions must recognize the limitations on the firm's ability later to sell off or expand capacity … to the q-theory of investment, and how these options affect the incentive to invest. Generally, the option to expand … effect of uncertainty on investment, how these option values change in response to shifts of the distribution of future …