This paper considers the supplier's strategic delivery lead time in a public procurement setting as the result of the firm's opportunistic behaviour on the optimal investment timing. In the presence of uncertainty on construction costs, we model the supplier's option to defer the contract's...

We provide a general framework in which to determine the optimal penalty fee inducing the contractor to respect the contracted delivery date in public procurement contracts (PPCs). We do this by developing a real option model that enables us to investigate the contractor's value of investment...

We analyze the optimal investment strategy of a monopolist which has subscribed a concession contract to provide a public utility, i.e. water service. We present a strategic model in which a monopolist chooses both the timing of the investment and the capacity. We focus not only on the value of...

In Italy and in many EU countries, the last decade was characterized by a large development of distributed generation power plants. Their presence determined new critical issues for the design and management of the overall energy system and the electric grid due to the presence of discontinuous...

At the start of the transition process in previously centrally planned economies the inflow of foreign capital was considered one of the main factors that allows the reduction of the economic and social costs of transformation. However, in practice, the role of foreign capital has appeared to be...

We study a long-term relationship between a risk-neutral firm that has been delegated to manage a local utility project and a regulator that has always the option-to-revoke the delegation. We show that when the threat of revocation is credible and the cost of exercising it is not too high, the...

Competition in public utility sectors has been encouraged in recent years throughout Europe. In this paper we try and analyse the welfare effects of these reforms in Italy, with particular attention to water and energy goods. The first step is to introduce a sensible measure of affordability of...