In this article we analyse the effects of different regulatory schemes (price cap and profit sharing) on a firm s … investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a … total investment. We also evaluate the reduction in the firm s value due to profit sharing, linking this reduction to the …

In this article we analyse the effects of different regulatory schemes (price cap and profit sharing) on a firm …'s investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a … total investment. We also evaluate the reduction in the firm's value due to profit sharing, linking this reduction to the …

In the literature investigating the impact of uncertainty on short-run and long-run investment, most authors have used … general ones and has the advantage of providing closed form solutions for both short-run investment rule and long-run rate of … capital accumulation. In this paper, we consider a firm facing a linear demand function with additive shocks and present a …

The paper considers the problem of evaluating the probability of investing in a capital-investment project as a measure … of the uncertainty-investment relationship in a real option model. By the use of the contingent claims analysis the …

In this article we analyse the effects of different regulatory schemes (price cap and profit sharing) on a firm …'s investment of endogenous size. Using a real option approach in continuous time, we show that profit sharing does not affect a … total investment. We also evaluate the reduction in the firm's value due to profit sharing, linking this reduction to the …

In a continuous-time framework we study the technology and investment choice problem of a continuous co … flexible technology allowing for such option. Investment is irreversible and flexibility is costly. The problem is solved … determining in the light of future prospects the optimal revision and then playing backward fixing the investment timing rule …

patient) and a lump-sum component, efficiency can be ensured both in the timing of adoption (dynamic) and the intensity of use … of the technology (static). If the second instrument is unavailable, a trade-off may emerge between static and dynamic … provider as an instrument to mitigate the trade-off between static and dynamic efficiency. Finally, the model is calibrated to …