Factor price uncertainty, technology choice and investment delay

The Effect Of Salvage Market On Strategic Technology Choice And Capacity Investment Decision Of Firm Under Demand Uncertainty

Technology Adoption under Relative Factor Price Uncertainty: The Putty-Clay Investment Model

A plant has more flexibility in choosing among different technologies before undertaking an investment than after installing a specific machine. This paper argues that the irreversibility of factor intensity choice may play an important role in explaining the dynamics of investment in the presence of relative factor price uncertainty. A higher degree of irreversibility in the choice of factor i...

Foreign Investment as Main Factor for Successful Funds and Its Effect on Trade Balance Strategic Technology Adoption under Technological Uncertainty

Technology choice under several uncertainty sources

We analyze a model of irreversible investment with two sources of uncertainty. A riskneutral decision maker has the choice between two mutually exclusive projects under input price and output price uncertainty. We propose a complete study of the shape of the rational investment region and we prove that it is never optimal to invest when the alternative investments generate the same payoff indep...

Input price risk and optimal timing of energy investment : choice between fossil - and biofuels ∗

We consider energy investment, when a choice has to be made between fossil fuel and biomass fired production technologies. A dynamic model is presented to illustrate the effect of the different degrees of input price uncertainty on the choice of technology and the timing of the investment. It is shown that when the choice of technology is irreversible, it may be optimal to postpone the investme...