Gryglewicz, Sebastian; Huisman, Kuno J.M.; Kort, Peter M. - In: Journal of Economic Dynamics and Control 32 (2008) 7, pp. 2191-2213
This paper revisits the important result of the real options approach to investment under uncertainty, which states that increased uncertainty raises the value of waiting and thus decelerates investment. Typically in this literature projects are assumed to be perpetual. However, in today's...