منابع مشابه
The Value of Waiting
Despite being rejected by finance theory, payback continues to be widely used as a method for evaluating capital investment projects. In situations where investment can be delayed, we show that the value of waiting to invest is an increasing function of payback period. Consequently, the optimal investment policy is equivalent to requiring that a project with positive net-present-value be launch...
متن کاملMigration and the Option Value of Waiting
Migration is an investment: it involves fixed, unrecoverable costs and uncertain future returns. If migration can be postponed, the option value of doing so may have positive value. Migration may not occur for a range of individuals who would otherwise migrate on a net present value basis. This paper models the migration decision using ideas developed by Pindyck (1991) and Dixit (1992). The opt...
متن کاملThe Value of Waiting to Trade
To capture trader heterogeneity in a market microstructure setting, we model a trader’s option to trade as an optimal stopping problem. This option to trade is much like a firm’s option to invest in the real options literature. The optimal bid-ask prices quoted by any trader are functions of the joint evolution of their own private value and the private value of their intended trading counterpa...
متن کاملThe Optimal Value of Waiting to Invest
We extend McDonald and Siegel’s (1986) model to the case where the expected rate of return of a project cannot be observed but is known to be either low or high. Waiting and observing the realizations of the value of the project provides information to the investor who can update her beliefs about the true value of the expected return. Moreover, the investor can purchase some additional informa...
متن کاملThe Value of Waiting to Learn
The goal of this paper is to study irreversible investment under incomplete information. We extend McDonald and Siegel’s (1986) model to the case where the expected rate of return of the project cannot be observed but is known to be either low or high. Waiting and observing the realizations of the value of the project provides information to the investor who can update her beliefs about the tru...
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ژورنال
عنوان ژورنال: Theoretical Economics Letters
سال: 2016
ISSN: 2162-2078,2162-2086
DOI: 10.4236/tel.2016.62023