Irreversible Investment

Irreversibility and Aggregate Investment | MIT Economics

complexity of the model. Characterization of irreversible investment. If investment is irreversible, the installed capital stock {K(r)} may depend on the whole.

Irreversible investment - ScienceDirect

This paper proposes, solves and characterizes a model of sequential irreversible investment by a firm facing uncertainty in technology, demand and price of ...

Irreversible Investment, Capital Costs and Productivity Growth

Irreversible investment implies that a firm must incur substantial costs as it attempts to disinvest, and accordingly capital cannot be shed like many other.

Irreversible Investment | SpringerLink

The cost of an irreversible investment cannot be recovered once it is installed. This restriction not only truncates negative investments, ...

Incentivizing Irreversible Investment | The Accounting Review

The firm can increase its productive capacity by purchasing new capital goods if demand improves, but is usually assumed to be unable to sell ...

Irreversible investment under predictable growth: Why land stays ...

The rational response to predictable growth combined with flexible investment conditions is to keep land vacant for extended periods.

Irreversibility, Uncertainty, and Investment - JSTOR

Again, the asset can be sold to another firm, but the investment is irreversible. As with the financial call option, this option to invest is valuable in part ...

Irreversibility, uncertainty, and investment (English)

Despite its importance to economic growth and the evolution of market structure, the investment behavior of firms, industries, and countries remains poorly ...

Irreversible Investment with Regime Shifts∗ - Berkeley Haas

investment is irreversible.1 In contrast to these studies, we do not assume that. (xt) t^0 is governed by a Markov process with constant drift an volatility ...

Irreversible Investment, Real Options, and Competition: Evidence ...

Empirically, a one-standard deviation increase in the volatility of real estate returns reduces the hazard rate of investment by 13 percent, equivalent to a 9 ...

An irreversible investment problem with a learning-by-doing feature

We study a model of irreversible investment for a decision-maker who has the possibility to gradually invest in a project with unknown value.

Irreversible Investment under Interest Rate Variability - jstor

I. Introduction. Most major investments are at least partly irreversible in the sense that firms cannot disinvest. The reason is.

Irreversibility, Uncertainty, and Investment - MIT

and determine whether or not the firm should invest. Section III then works through a basic continuous-time model of irreversible investment that was first.

Uncertainty & Irreversible Investment: An Empirical Analysis of ...

Option pricing techniques have been used to examine the determinants of irreversible investment under uncertainty, and show that even risk-neutral firms may be ...

Irreversible investment and industry equilibrium

We establish the equivalence of competitive industry equilibrium with a central planner's decision problem under uncertainty, when investment is irreve.

On Irreversible Investment - EconStor

On Irreversible Investment ... Abstract: This paper develops a general theory of irreversible investment of a single firm that chooses a dynamic capacity ...

Plant-Level Irreversible Investment and Equilibrium Business Cycles

Plant-Level Irreversible Investment and Equilibrium Business Cycles by Marcelo L. Veracierto. Published in volume 92, issue 1, pages 181-197 of American ...

Irreversible investment, asset returns, and time-inconsistent ...

This paper introduces time-inconsistent preferences into the standard model of capacity choice and investigates its influences on entrepreneurial firms' ...

Irreversible Investment, Capital Costs and Productivity Growth

Results indicate that the irreversibility premium raises the opportunity cost of capital by 70 percent. This implies an average annual hurdle ...

Irreversible Investment, Capacity Choice, and the Value of the Firm

Abstract. A model of capacity choice and utilization is developed consistent with value maximization when investment is irreversible and future demand is ...