We consider the problem of cost assessment in the context of switching stochastic regimes. The dynamics of a given asset include a background noise, described by a Brownian motion and a random shock, the impact of which is characterized by changes in the coefficient diffusions. A particular...

We consider the problem of cost assessment in the context of switching stochastic regimes. The dynamics of a given asset include a background noise, described by a Brownian motion and a random shock, the impact of which is characterized by changes in the coefficient diffusions. A particular...

In this article we develop a real options approach to the consideration of a sudden drop in futures cash flows in an investment project and its impact on the investment strategy of the company. We apply our model in the context of investing in a wind energy project because of the relatively long...

This paper provides a conceptual framework to analyze investment projects with networks externalities. In the presence of such effects, consumers make their choice of consumption according to the number of people having already adopted the product or the service. The process of diffusion of such...