Irreversibility, Uncertainty, and Investment Irreversibility. Uncertainty. and Investment* Irreversibility. Uncertainty. and Investment

@inproceedings{PindyckIrreversibilityUA,
  title={Irreversibility, Uncertainty, and Investment Irreversibility. Uncertainty. and Investment* Irreversibility. Uncertainty. and Investment},
  author={Robert S. Pindyck}
}
Most investment expenditures have two important characteristics: First, they are largely irreversible; the firm cannot disinvest, so the expenditures are sunk costs. Second, they can be delayed, allowing the firm to wait for new information about prices, costs, and other market conditions before committing resources. An emerging literature has shown that this has important implications for investment decisions, and for the determinants of investment spending. Irreversible investment is… CONTINUE READING
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