We study optimal investment in technologies characterized by the learning curve. There are two investment patterns … scale. If the curve is steep, firms invest earlier and on a smaller scale. We further demonstrate that learning investment … differs greatly from investment in technologies without learning effects. Learning investments generate substantial initial …

A dynamic model featuring a stochastic technology frontier shows significant impact of technology adoption for asset … prices. In equilibrium, firms operating with old capital are riskier because costly technology adoption restricts their … flexibilities in upgrading to the latest technology, making them more exposed to technology frontier shocks. Consistent with the …

aversion, resulting in lower return investment choices. Therefore, we assess whether incentives associated with stock option …Traditional finance theory suggests that riskier investments should yield higher returns. Challenging this notion … compensation (“vega”), presumed to increase managers' appetite for risk, uniformly yield higher returns on R&D investment. Our …

perturbations in preferences induced by common option compensation schemes, and such incentives are weaker when their horizon is … longer. Robust option incentives are possible, but require several arbitrarily large exercise prices, and are not always …