Ryuta Takashima

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In this paper, we analyze investment decision on the ‘entry-exit’ project, which can be active and suspended by paying some cost, in a duopoly setting. The model incorporates Dixit [5] and Huisman and Kort [10]. That is, we propose a new extension of the model that captures competitive nature in the recent trend. Then we show it is optimal that the firm(More)
In this paper, we analyze entry and exit decisions in a symmetric duopoly setting. The model is based on Dixit (1989), which is a standard model in this area. To incorporate competitive nature into the output price, we use an inverse demand function. We aim to present an equilibrium strategy of entry and exit decisions in a symmetric duopoly. To do so, we(More)
In most real options models for evaluating power plants, it is assumed that the price fluctuates stochastically such as a geometric Brownian motion. In actual electricity market, the prices are determined by supply and demand, and the supply and demand balance may cause the price spike. Especially, the supply characteristics, which depend on the type and(More)
Electricity production accounts for around 40% of global energy-related CO2 emissions and it is expected that the electricity demand increases to twice the current level in 2050. Therefore it is necessary to invest in low-carbon thermal power plants, nuclear and renewable energy for realizing low-carbon economy. These policies may require a large amount of(More)
In this paper, we study an investment problem in which two asymmetric firms face competition and the regime characterizing economic conditions follows Markov switching. We derive the value functions and investment thresholds of a leader and a follower. One of the interesting results is that in contrast to the case of no regime switching, even if the current(More)
Deregulation of electricity industries has created wholesale markets with uncertain prices and offered greater flexibility to investors to make decisions. In this paper, we consider the problem of a typical investor who has discretion over not only the timing, but also the sizing of a new power plant. The interaction between these two types of managerial(More)
In this paper we examine an optimal investment policy of the firm that is financed by issuing equity and debt. Recently, a number of researchers have studied the interaction among firm’s investment and financing decisions under uncertainty by means of real option framework. In the literature, investment problems for a firm with growth options, that is(More)