Irreversibility, uncertainty and investment

Most investment expenditures have two important characteristics. First, they are largely irreversible; the firm cannot disinvest, so the expenditures are sunk costs. Second, they can be delayed, allowing the firm to wait for new information about prices, costs, and other mark...

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Bibliographic Details
Main Author: Pindyck, Robert S.
Format: Working Paper
Published: MIT Center for Energy and Environmental Policy Research 2009
Online Access:http://hdl.handle.net/1721.1/50140