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Repeated real options: optimal investment behaviour and a good rule of thumb

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  • Malchow-Moller, Nikolaj
  • Thorsen, Bo Jellesmark

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  • Malchow-Moller, Nikolaj & Thorsen, Bo Jellesmark, 2005. "Repeated real options: optimal investment behaviour and a good rule of thumb," Journal of Economic Dynamics and Control, Elsevier, vol. 29(6), pages 1025-1041, June.
    • Handle: RePEc:eee:dyncon:v:29:y:2005:i:6:p:1025-1041
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    1. Farzin, Y. H. & Huisman, K. J. M. & Kort, P. M., 1998. "Optimal timing of technology adoption," Journal of Economic Dynamics and Control, Elsevier, vol. 22(5), pages 779-799, May.
    2. Doraszelski, Ulrich, 2001. "The net present value method versus the option value of waiting: A note on Farzin, Huisman and Kort (1998)," Journal of Economic Dynamics and Control, Elsevier, vol. 25(8), pages 1109-1115, August.
    3. Ye, Meng-Hua, 1990. "Optimal replacement policy with stochastic maintenance and operation costs," European Journal of Operational Research, Elsevier, vol. 44(1), pages 84-94, January.
    4. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    5. Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(4), pages 707-727.
    6. Wambach, Achim, 2000. "Payback criterion, hurdle rates and the gain of waiting," International Review of Financial Analysis, Elsevier, vol. 9(3), pages 247-258.
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    Cited by:

    1. Ben Abdallah, Skander & Lasserre, Pierre, 2016. "Asset retirement with infinitely repeated alternative replacements: Harvest age and species choice in forestry," Journal of Economic Dynamics and Control, Elsevier, vol. 70(C), pages 144-164.
    2. Yemshanov, Denys & McCarney, Geoffrey R. & Hauer, Grant & Luckert, M.K. (Marty) & Unterschultz, Jim & McKenney, Daniel W., 2015. "A real options-net present value approach to assessing land use change: A case study of afforestation in Canada," Forest Policy and Economics, Elsevier, vol. 50(C), pages 327-336.
    3. Strange, Niels & Jacobsen, Jette Bredahl & Thorsen, Bo Jellesmark, 2019. "Afforestation as a real option with joint production of environmental services," Forest Policy and Economics, Elsevier, vol. 104(C), pages 146-156.
    4. Michail Chronopoulos & Verena Hagspiel & Stein-Erik Fleten, 2017. "Stepwise investment and capacity sizing under uncertainty," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(2), pages 447-472, March.
    5. Adkins, Roger & Paxson, Dean, 2013. "Deterministic models for premature and postponed replacement," Omega, Elsevier, vol. 41(6), pages 1008-1019.
    6. Michail Chronopoulos, Verena Hagspiel, and Stein-Erik Fleten, 2016. "Stepwise Green Investment under Policy Uncertainty," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    7. Guthrie, Graeme, 2023. "Optimal adaptation to uncertain climate change," Journal of Economic Dynamics and Control, Elsevier, vol. 151(C).
    8. Adkins, Roger & Paxson, Dean, 2019. "Rescaling-contraction with a lower cost technology when revenue declines," European Journal of Operational Research, Elsevier, vol. 277(2), pages 574-586.
    9. Yatsenko, Yuri & Hritonenko, Natali, 2017. "Machine replacement under evolving deterministic and stochastic costs," International Journal of Production Economics, Elsevier, vol. 193(C), pages 491-501.
    10. Nagae, Takeshi & Akamatsu, Takashi, 2008. "A generalized complementarity approach to solving real option problems," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1754-1779, June.
    11. Koch, Nicolas & Reuter, Wolf Heinrich & Fuss, Sabine & Grosjean, Godefroy, 2017. "Permits vs. offsets under investment uncertainty," Resource and Energy Economics, Elsevier, vol. 49(C), pages 33-47.
    12. Siddiqui, Afzal & Fleten, Stein-Erik, 2010. "How to proceed with competing alternative energy technologies: A real options analysis," Energy Economics, Elsevier, vol. 32(4), pages 817-830, July.
    13. Gianluca Marcato & Robert Fourt & Ch Ward & Robert Fourt & Charles Ward, 2007. "Real Option Pricing in Mixed-use Development Projects," ERES eres2007_223, European Real Estate Society (ERES).
    14. Chronopoulos, Michail & Siddiqui, Afzal, 2014. "When is it Better to Wait for a New Version? Optimal Replacement of an Emerging Technology under Uncertainty," Discussion Papers 2014/26, Norwegian School of Economics, Department of Business and Management Science.
    15. Michail Chronopoulos & Afzal Siddiqui, 2015. "When is it better to wait for a new version? Optimal replacement of an emerging technology under uncertainty," Annals of Operations Research, Springer, vol. 235(1), pages 177-201, December.
    16. Yuri Yatsenko & Natali Hritonenko, 2016. "Asset replacement under improving operating and capital costs: a practical approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(10), pages 2922-2933, May.
    17. Davis, Graham A. & Cairns, Robert D., 2012. "Good timing: The economics of optimal stopping," Journal of Economic Dynamics and Control, Elsevier, vol. 36(2), pages 255-265.
    18. Michail Chronopoulos, Derek Bunn, and Afzal Siddiqui, 2014. "Optionality and Policymaking in Re-Transforming the British Power Market," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    19. Sendstad, Lars Hegnes & Chronopoulos, Michail, 2021. "Strategic technology switching under risk aversion and uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 126(C).

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