Download or read book Investment under Uncertainty written by Robert K. Dixit and published by Princeton University Press. This book was released on 2012-07-14 with total page 484 pages. Available in PDF, EPUB and Kindle. Book excerpt: How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.
Download or read book Irreversibility Uncertainty and Investment written by Robert S. Pindyck and published by World Bank Publications. This book was released on 1989 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Irreversible investment is especially sensitive to such risk factors as volatile exchange rates and uncertainty about tariff structures and future cash flows. If the goal of macroeconomic policy is to stimulate investment, stability and credibility may be more important than tax incentives or interest rates.
Download or read book Real Options and Investment Under Uncertainty written by Eduardo S. Schwartz and published by MIT Press. This book was released on 2004 with total page 890 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study of investment under uncertainty was stagnant for several decades until developments in real options revitalized the field. The topics covered in this book include the reasons behind the under-investment programme.
Download or read book Optimal Control of Age structured Populations in Economy Demography and the Environment written by Raouf Boucekkine and published by Routledge. This book was released on 2013-05-13 with total page 321 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book covers a wide range of topics within mathematical modelling and the optimization of economic, demographic, technological and environmental phenomena. Each chapter is written by experts in their field and represents new advances in modelling theory and practice. These essays are exemplary of the fruitful interaction between theory and practice when exploring global and local changes. The unifying theme of the book is the use of mathematical models and optimization methods to describe age-structured populations in economy, demography, technological change, and the environment. Emphasis is placed on deterministic dynamic models that take age or size structures, delay effects, and non-standard decision variables into account. In addition, the contributions deal with the age structure of assets, resources, and populations under study. Interdisciplinary modelling has enormous potential for discovering new insights in global and regional development. Optimal Control of Age-structured Populations in Economy, Demography, and the Environment is a rich and excellent source of information on state-of-the-art modelling expertise and references. The book provides the necessary mathematical background for readers from different areas, such as applied sciences, management sciences and operations research, which helps guide the development of practical models. As well as this the book also surveys the current practice in applied modelling and looks at new research areas for a general mathematical audience. This book will be of interest primarily to researchers, postgraduate students, as well as a wider scientific community, including those focussing on the subjects of applied mathematics, environmental sciences, economics, demography, management, and operations research.
Download or read book Competitive Strategy written by Benoit Chevalier-Roignant and published by MIT Press. This book was released on 2014-08-29 with total page 517 pages. Available in PDF, EPUB and Kindle. Book excerpt: A new paradigm for balancing flexibility and commitment in management strategy through the amalgamation of real options and game theory. Corporate managers who face both strategic uncertainty and market uncertainty confront a classic trade-off between commitment and flexibility. They can stake a claim by making a large capital investment today, influencing their rivals' behavior, or they can take a “wait and see” approach to avoid adverse market consequences tomorrow. In Competitive Strategy, Benoît Chevalier-Roignant and Lenos Trigeorgis describe an emerging paradigm that can quantify and balance commitment and flexibility, “option games,” by which the decision-making approaches of real options and game theory can be combined. The authors first discuss prerequisite concepts and tools from basic game theory, industrial organization, and real options analysis, and then present the new approach in discrete time and later in continuous time. Their presentation of continuous-time option games is the first systematic coverage of the topic and fills a significant gap in the existing literature. Competitive Strategy provides a rigorous yet pragmatic and intuitive approach to strategy formulation. It synthesizes research in the areas of strategy, economics, and finance in a way that is accessible to readers not necessarily expert in the various fields involved.
Download or read book Real R D Options written by Dean Paxson and published by Elsevier. This book was released on 2002-12-05 with total page 345 pages. Available in PDF, EPUB and Kindle. Book excerpt: Real R&D options are among the earliest modelled real options, with now ten primary practical uses: general R&D planning, planning R&D in stages, evaluating test information, new product development timing, operations, abandonment, risk sharing, market funding, industry strategy and regulation. This book was partly motivated by requests to identify and develop real option models for R&D in telecommunications, petroleum technology and biotechnology. Nine new models cover information and implementation costs, analytical solutions for mean reverting, or fat tailed revenues, endogenous learning and exogenous and experiential shocks, American sequential options, and innovator advantages. Four new applications include forward start development options, exploration options, innovation with information costs, and innovator's real values with changing market share. R&D directors and researchers will find several uses for these models: - general R&D planning - evaluating test information - new product development timing - risk sharing - industry strategy and regulation - A practical guide to how organizations can use Real Option techniques to effectively value research and development by companies - Provides a rigorous theoretical underpinning of the use of Real Option techniques - Real Options applications are orientated around the economies of North America, Europe and Asia, for an international perspective
Download or read book Real Options Theory written by Jeffrey J. Reuer and published by Emerald Group Publishing. This book was released on 2007-07-05 with total page 520 pages. Available in PDF, EPUB and Kindle. Book excerpt: Examines the ways in which real options theory can contribute to strategic management. This volume offers conceptual pieces that trace out pathways for the theory to move forward and presents research on the implications of real options for strategic investment, organization, and firm performance.
Download or read book Economic and Financial Decisions under Risk written by Louis Eeckhoudt and published by Princeton University Press. This book was released on 2011-10-30 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: An understanding of risk and how to deal with it is an essential part of modern economics. Whether liability litigation for pharmaceutical firms or an individual's having insufficient wealth to retire, risk is something that can be recognized, quantified, analyzed, treated--and incorporated into our decision-making processes. This book represents a concise summary of basic multiperiod decision-making under risk. Its detailed coverage of a broad range of topics is ideally suited for use in advanced undergraduate and introductory graduate courses either as a self-contained text, or the introductory chapters combined with a selection of later chapters can represent core reading in courses on macroeconomics, insurance, portfolio choice, or asset pricing. The authors start with the fundamentals of risk measurement and risk aversion. They then apply these concepts to insurance decisions and portfolio choice in a one-period model. After examining these decisions in their one-period setting, they devote most of the book to a multiperiod context, which adds the long-term perspective most risk management analyses require. Each chapter concludes with a discussion of the relevant literature and a set of problems. The book presents a thoroughly accessible introduction to risk, bridging the gap between the traditionally separate economics and finance literatures.
Download or read book Dissertation Abstracts International written by and published by . This book was released on 2008 with total page 628 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Analytics of Uncertainty and Information written by Sushil Bikhchandani and published by Cambridge University Press. This book was released on 2013-08-12 with total page 509 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has been explosive progress in the economic theory of uncertainty and information in the past few decades. This subject is now taught not only in departments of economics but also in professional schools and programs oriented toward business, government and administration, and public policy. This book attempts to unify the subject matter in a simple, accessible manner. Part I of the book focuses on the economics of uncertainty; Part II examines the economics of information. This revised and updated second edition places a greater focus on game theory. New topics include posted-price markets, mechanism design, common-value auctions, and the one-shot deviation principle for repeated games.
Download or read book Real Options in Practice written by Marion A. Brach and published by John Wiley & Sons. This book was released on 2003-04-07 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: Explores real option theory applied in practice Real options are quickly becoming the valuation and decision-making method of choice for many companies, including oil and gas companies, utilities and natural resource companies, pharmaceutical and biotech companies, Internet companies, and many others. Real Options in Practice allows readers to view the world of real options from the vantage point of a corporate practitioner applying real option valuation techniques on a regular basis. Expert Marion Brach describes the challenges of implementing a real option framework in practice within a corporate setting. Touching on the real options most firms care about, Real Options in Practice identifies the classic types of real options-deferral, abandonment, switching, expansion, and compound-and explores the main concepts critical to understanding real option theory. Through Brach's own three-step real option valuation method readers will learn how the theory of real options is now being applied to drive better, more profitable corporate decision-making. Marion A. Brach, MD, MBA (Hagen, Germany), has undertaken financial valuation of business opportunities and acquisitions using scenario and real option valuation in the biotech industry. A recognized expert on real option theory and practice, Brach received her MBA from the Manchester Business School and frequently speaks at real option seminars.
Download or read book The New Investment Theory of Real Options and its Implication for Telecommunications Economics written by James H. Alleman and published by Springer Science & Business Media. This book was released on 1999-12-31 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt: The issue of costing and pricing in the telecommunications industry has been hotly debated for the last twenty years and we are still wrestling over the cost of the local exchange for access by interexchange and competitive local exchange carriers, as well as for universal service funding. With the advent of competition, the historical costing schemes had to change. Federal regulators wanted to ensure that monopoly rates did not subsidize competitive offerings. As a result, various costing methodologies were devised to allocate costs among the dominant carriers' services. The issue of costs can be summarized as two-fold: the quantitative determination of the level of costs and the proper attribution of those costs. Both are fraught with questions. The amount of costs, for instance, can vary from book costs to marginal costs. The attribution of costs can vary from those that are directly attributable to those that are joint and common. Hence, the need for costing theories and models. The industry is constantly in search of theories and models that more accurately reflect the underlying costs of service. It is in this light that the papers have been compiled for The New Investment Theory of Real Options in Telecommunications. Real options theory attempts to consider management's flexibility in valuation analysis and corrects the deficiencies of the traditional discounted present-value and decision tree analyses. This book sets forth an introduction and overview of the subject, and then provides the reader with a primer on real options. The volume highlights the controversies that surround the application of real options in the telecommunications industry; however, the editors have effectively separated the issues of application from those of interpretation.
Download or read book New Directions in Finance written by Dilip K. Ghosh and published by Routledge. This book was released on 2018-10-24 with total page 310 pages. Available in PDF, EPUB and Kindle. Book excerpt: The stock market crash of 1987 had a tumultuous effect on the world of finance. The reverberations of this collapse are still being felt and a number of issues and problems are still unresolved. New Directions in Finance discusses these issues and looks to future developments in international finance. The book contains sections which look at capital structure; the cost of capital and agency issues; mergers and takeovers, and options, futures and forward trading. Including a contribution by Nobel Laureate Merton Miller, New Directions in Finance presents a state of the art guide to international finance.
Download or read book Competitive Strategy written by Benoit Chevalier-Roignant and published by MIT Press. This book was released on 2011-12-22 with total page 517 pages. Available in PDF, EPUB and Kindle. Book excerpt: A new paradigm for balancing flexibility and commitment in management strategy through the amalgamation of real options and game theory. Corporate managers who face both strategic uncertainty and market uncertainty confront a classic trade-off between commitment and flexibility. They can stake a claim by making a large capital investment today, influencing their rivals' behavior, or they can take a “wait and see” approach to avoid adverse market consequences tomorrow. In Competitive Strategy, Benoît Chevalier-Roignant and Lenos Trigeorgis describe an emerging paradigm that can quantify and balance commitment and flexibility, “option games,” by which the decision-making approaches of real options and game theory can be combined. The authors first discuss prerequisite concepts and tools from basic game theory, industrial organization, and real options analysis, and then present the new approach in discrete time and later in continuous time. Their presentation of continuous-time option games is the first systematic coverage of the topic and fills a significant gap in the existing literature. Competitive Strategy provides a rigorous yet pragmatic and intuitive approach to strategy formulation. It synthesizes research in the areas of strategy, economics, and finance in a way that is accessible to readers not necessarily expert in the various fields involved.
Download or read book Entry and Exit Decisions with Competition Under Uncertainty written by Alexander Kwok-Wah Fung and published by . This book was released on 1995 with total page 414 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Real Options written by Martha Amram and published by Oxford University Press on Demand. This book was released on 1999 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using real-world examples and clear case studies, the authors provide investors and managers with an innovative method for assessing a company's non-financial assets, allowing them to assess opportunities whose financial rewards are less than certain.
Download or read book Confronting Climate Uncertainty in Water Resources Planning and Project Design written by Patrick A. Ray and published by World Bank Publications. This book was released on 2015-08-20 with total page 149 pages. Available in PDF, EPUB and Kindle. Book excerpt: Confronting Climate Uncertainty in Water Resources Planning and Project Design describes an approach to facing two fundamental and unavoidable issues brought about by climate change uncertainty in water resources planning and project design. The first is a risk assessment problem. The second relates to risk management. This book provides background on the risks relevant in water systems planning, the different approaches to scenario definition in water system planning, and an introduction to the decision-scaling methodology upon which the decision tree is based. The decision tree is described as a scientifically defensible, repeatable, direct and clear method for demonstrating the robustness of a project to climate change. While applicable to all water resources projects, it allocates effort to projects in a way that is consistent with their potential sensitivity to climate risk. The process was designed to be hierarchical, with different stages or phases of analysis triggered based on the findings of the previous phase. An application example is provided followed by a descriptions of some of the tools available for decision making under uncertainty and methods available for climate risk management. The tool was designed for the World Bank but can be applicable in other scenarios where similar challenges arise.
