Technology choice under several uncertainty sources

  title={Technology choice under several uncertainty sources},
  author={Catherine Bobtcheff and St{\'e}phane Villeneuve},
  journal={European Journal of Operational Research},
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 independently of its size. A key feature of this bidimensional degree of uncertainty is thus that the… CONTINUE READING

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