Sequential Investment in Emerging Technologies under Policy Uncertainty

@inproceedings{Sendstad2016SequentialII,
  title={Sequential Investment in Emerging Technologies under Policy Uncertainty},
  author={Lars Hegnes Sendstad and Michail Chronopoulos},
  year={2016}
}
Investment in emerging technologies is particularly challenging, since, apart from uncertainty in revenue streams, firms must also take into account both policy uncertainty and the random arrival of innovations. We assume that the former is reflected in the sudden provision and retraction of a support scheme, which takes the form of a fixed premium on top of the output price. Thus, we develop an analytical framework for sequential investment in order to determine how price, technological, and… CONTINUE READING

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