摘要
A firm, which faces technical uncertainty as in Pindyck (1993) can choose between two mutually exclusive investment projects, Projects 1 and 2. The added option to exercise Project 2 makes the firm less likely to exercise Project 1. An increase in the degree of technical uncertainty, the investment rate or the investment value upon completion for Project 2 encourages the firm to exercise Project 2 by increasing the trigger level of the expected cost of Project 2. This, however, ambiguously affects the firm's incentive to exercise Project 1, as the firm would rather implement Project 1 (2) in a region where the expected cost of Project 2 is relatively high (low).
原文 | ???core.languages.en_GB??? |
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頁(從 - 到) | 4723-4728 |
頁數 | 6 |
期刊 | Applied Economics |
卷 | 43 |
發行號 | 30 |
DOIs | |
出版狀態 | 已出版 - 12月 2011 |