feature for the firm's investment policies are investigated in an optimal control problem with distributed parameters.It turns … out that investing in capital goods of di¤erent age is done such that the net present value of marginal investment equals … zero.Comparing the returns of investment in capital goods of different age, the higher productivity of younger capital …

This paper considers the impact of investment cost asymmetry on the value and optimal real option exercise strategies … the level of asymmetry, a marginal increase in the investment cost of the firm with the cost disadvantage can increase … socially less desirable outcome than if one of the competitors has a significant investment cost disadvantage.Finally, we prove …

This paper considers the problem of investment timing under uncertainty in a duopoly framework.When both firms want to …

economic environment on the investment decision of the firm.We propose a method to model the impact of a policy change on … investment behavior in which, contrary to the earlier models based on Poisson processes, uncertainty concerning the moment of the …) investment cost, which is, for instance, caused by a reduction in the investment tax credit.The firm has an incomplete …

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 …

which adds flexibility in timing of the investment decision.This flexibility introduces an option value of waiting which …