Implementation of infrastructure investment projects

Evaluating Incremental/Iterative Software Projects by Valuing Investment/Implementation Risks

The optimisation process of scheduling an incremental/iterative software project can be approached as a multi criteria decision problem, formulated by a linear programming model, aimed to propose alternative project schedules and examine cost trade-offs. In this paper, we apply the prominent economic theory of Real Options to analyse project investment risks and discover the economic value asso...

Labour-based infrastructure projects

Political Economy of Infrastructure Investment

The importance of infrastructure for growth is well established in the macroeconomic literature. Previous research has treated public investment in infrastructure as exogenous. We remedy this shortcoming by providing a political economy analysis of infrastructure choice based upon consumer preferences derived from spatial competition models. In this setting, infrastructure investment has two po...

Irreversible Investment in Alternative Projects

We examine the problem of a risk-neutral investor who has to choose among two alternative projects of different scales under output price uncertainty. We show that as soon as investment in the smaller scale project is sometimes optimal, the optimal investment strategy is not a trigger strategy and the optimal investment region is dichotomous. Whenever the investor has the opportunity to switch ...

Optimal investment in development projects

We consider investments in development projects within competitive environments where the ‘‘winner takes everything’’. Under stationary uncertainty, it is optimal to start investing immediately at full capacity and continue until exhausting the allocated budget. For non-stationary environments, active investment, possibly deferred, will always be at full capacity; an example demonstrates that f...