Technology choice under several uncertainty sources

@article{Bobtcheff2010TechnologyCU,
  title={Technology choice under several uncertainty sources},
  author={Catherine Bobtcheff and St{\'e}phane Villeneuve},
  journal={European Journal of Operational Research},
  year={2010},
  volume={206},
  pages={586-600}
}
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

From This Paper

Figures, tables, results, connections, and topics extracted from this paper.
2 Extracted Citations
21 Extracted References
Similar Papers

Citing Papers

Publications influenced by this paper.

Referenced Papers

Publications referenced by this paper.
Showing 1-10 of 21 references

The Valuation of American Options on Multiple Assets

  • M. Broadie, J. Detemple
  • Mathematical Finance,
  • 1997
Highly Influential
4 Excerpts

Technology Choice and Real Options under Bertrand Competition, Working Paper, LERNA

  • C. Bobtcheff
  • 2008
Highly Influential
3 Excerpts

Valuation of exploration and production asstes: an overview of real option models

  • M.A.G. Dias
  • Journal of Petroleum Science and Engineering,
  • 2004
Highly Influential
3 Excerpts

The dynamics of commodity spot and futures markets: A primer

  • R S.Pindyck
  • TEnergy Journal,
  • 2001
Highly Influential
8 Excerpts

Investment under Uncertainty, Princeton University Press, Princeton

  • A. K. Dixit, S R.
  • Pindyck,
  • 1994
Highly Influential
11 Excerpts

Choosing among alternative discrete investment projects under uncertainty

  • A. K. Dixit
  • Economics Letters
  • 1993
Highly Influential
8 Excerpts

The Value of Waiting to Invest

  • R. McDonald, D. Siegel
  • Quaterly Journal of Economics,
  • 1986
Highly Influential
6 Excerpts

Environmental Preservation, Uncertainty and Irreversibility

  • K. J. Arrow, A. C. Fisher
  • Quaterly Journal of Economics,
  • 1974
Highly Influential
5 Excerpts

Similar Papers

Loading similar papers…