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This paper explores the possibility of using a large scale multi-country contingent valuation study for making decisions concerning global resources in the specific context of valuing a large set of tropical rainforests. Before considering the practical issues involved in implementing such a study, the paper addresses philosophical issues related to the use of contingent valuation including the...

We study the performance of the English auction under different assumptions about the seller’s degree of “Bayesian sophistication.” We define the effectiveness of an auction as the ratio between the expected revenue it generates for the seller and the expected valuation of the object to the bidder with the highest valuation (total surplus). We identify tight lower bounds on the effectiveness of...

B et al. (2005) describe an approach for using traditional decision analysis tools to solve real-option valuation problems. Their approach calls for a mix of discounted cash flow analysis and risk-neutral valuation methods and is implemented using Monte Carlo simulation and binomial decision trees. In this note, I critique their approach and discuss some alternative approaches for solving these...

The main purpose of this paper is to propose a fuzzy approach for investment project valuation in uncertain environments from the aspect of real options. The traditional approaches to project valuation are based on discounted cash flows (DCF) analysis which provides measures like net present value (NPV) and internal rate of return (IRR). However, DCF-based approaches exhibit two major pitfalls....

A series of five field and laboratory studies reveal a temperature-premium effect: warm temperatures increase individuals' valuation of products. We demonstrate the effect across a variety of products using different approaches to measure or manipulate physical warmth and different assessments of product valuation. The studies suggest that exposure to physical warmth activates the concept of em...

Valuation is often said to be “an art not a science” but this relates to the techniques employed to calculate value not to the underlying concept itself. Valuation is the process of estimating price in the market place. Yet, such an estimation will be affected by uncertainties. Uncertainty in the comparable information available; uncertainty in the current and future market conditions and uncer...

A valuation principle is a mapping that assigns a number (value) to a random variable (payoff). This paper constructs a transformation on valuation principles by embedding them in a financial environment. Given an a priori valuation rule u, we define the associated a posteriori valuation rule h by an indifference argument: The u-value of optimally investing in the financial market alone should ...