reverting processes are rarely used in investment models in the literature. In most models, geometric Brownian motion processes … investigations of aggregate industry investment …

This paper generalizes the theory of irreversible investment under uncertainty by allowing for risk averse investors in … aversion to examine the e ects of risk aversion, price uncertainty, and other parameters on the optimal investment decision ….We nd that risk aversion reduces investment, particularly if the investment size is large.Moreover, we nd that a rise in …

.Kulatilaka and Perotti [1998, Management Science] nd that, in a two-period model, increased product market uncertainty could … which adds flexibility in timing of the investment decision.This flexibility introduces an option value of waiting which … increases with uncertainty.In contrast with the two-period model, despite the existence of the strategic option of becoming a …

that profit uncertainty always delays investment, even in the presence of a strategic option of becoming the first investor. …This paper considers the impact of investment cost asymmetry on the value and optimal real option exercise strategies … the level of asymmetry, a marginal increase in the investment cost of the firm with the cost disadvantage can increase …

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through … the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the … probability is not the best measure of investment. The sign of the total effect is again ambiguous. This ambiguity is illustrated …

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through … the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the … probability is not the best measure of investment. The sign of the total effect is again ambiguous. This ambiguity is illustrated …

This paper deals with capital budgeting decisions under uncertainty. We present an Aggregate Return On Investment (AROI … constitutes a link between arbitrage choice theory and corporate investment theory, and shows that explicit discounting is not …

We study the effects of uncertainty on corporate leverage adjustments with respect to investment spikes and find that … overlevered and underlevered firms behave very differently in response to the combination of uncertainty and investment spikes …. Overlevered firms facing high uncertainty converge to their targets substantially faster, whereas their counterparts facing low …

The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm …