A question has arisen concerning the relationship between the financial theory of options and the concept of option value developed in the literature on environmental preservation. This article presents simple models in each approach and then demonstrates their equivalence. The conventional,...

This paper provides a general characterization of subgame-perfect equilibria for a strategic timing problem, where two firms have the (real) option to invest irreversibly in some market. Profit streams are uncertain and depend on the market structure. The analysis of the problem emphasizes its...