Long run value stabilization in a real options perspective
AbstractThe present value of growth opportunities with stable long run value and decreasing investment cost is addressed in a real options perspective. The model is solved in terms of closed form solutions, and a duality between elementary real options of waiting to invest is conjectured to be a fundamental structure of a forthcoming theory of real options. A pure capital budgeting perspective is pursued. Natural lines for future research are accounted for.
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Bibliographic InfoPaper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number 2009-EP01.
Date of creation: 2009
Date of revision:
PVGO; real options; strategic investment; learning;
Find related papers by JEL classification:
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-22 (All new papers)
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