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Risk and risk preferences belong to the key determinants of investment-based technology adoption in agriculture. We develop and apply a novel approach in which an inverse second order stochastic dominance approach is integrated into a stochastic dynamic farm-level model to quantify the effect of...
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and real estate. We discuss the traditional valuation methods, in particular the net present value (NPV) rule, and show in … what circumstances these can lead to suboptimal investment decisions. Emphasis is placed on a real option valuation … bound in a competitive market and the real option exercise criteria and valuation models as providing the upper bound to …
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