Comments on the Investment-Uncertainty Relationship in a Real Option Model
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چکیده
منابع مشابه
On the investment}uncertainty relationship in a real options model
It appears to be widely accepted in the real options literature that an increase in uncertainty should have an inhibiting e!ect on investment. Our article demonstrates that the notion of a negative uncertainty}investment relationship is not always correct. We show that in certain situations, an increase in uncertainty can actually increase the probability of investing, and thereby have a positi...
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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 of reaching the level has been identified, yielding a total effect with ambiguous sign. This paper makes three points. The “opposing” effect is not...
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Investment in renewable energies especially solar energies is encountered with numerous uncertainties considering the increased dynamism in economic and financial conditions and makes investment in this field irreversible to a large extent, paying attention to modern methods of economic appraisal of such investments is highly important. A framework is provided in the current study in order to e...
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Only recently the general assumption of a negative investment-uncertainty relationship has been questioned in the literature and some examples of a nonmonotonic investment-uncertainty relationship have been found. By analyzing the influence of uncertainty on the probability to invest in a given time we show that the non-monotonicity of this relationship is not an exemption but the rule. Further...
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In this paper we analyse the impact of policy uncertainty on foreign direct investment strategies. The paper follows the real options approach, which allows to investigate the value to a firm of waiting to invest and/or disinvest, when payoffs are stochastic due to political uncertainty and investments are partially reversible. Across the board we find that political uncertainty can be very det...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2001
ISSN: 1556-5068
DOI: 10.2139/ssrn.277550