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4 edition of Investment, capacity, and uncertainty found in the catalog.

Investment, capacity, and uncertainty

Simon Gilchrist

Investment, capacity, and uncertainty

a putty-clay approach

by Simon Gilchrist

  • 102 Want to read
  • 33 Currently reading

Published by National Bureau of Economic Research in Cambridge, MA .
Written in English

    Subjects:
  • Capital investments -- Econometric models.

  • Edition Notes

    StatementSimon Gilchrist, John C. Williams.
    SeriesNBER working paper series ;, working paper 10446, Working paper series (National Bureau of Economic Research : Online) ;, working paper no. 10446.
    ContributionsWilliams, John C., National Bureau of Economic Research.
    Classifications
    LC ClassificationsHB1
    The Physical Object
    FormatElectronic resource
    ID Numbers
    Open LibraryOL3476203M
    LC Control Number2005615668

    OPTIMAL CAPACITY INVESTMENT AND PRICING ACROSS INTERNATIONAL MARKETS UNDER EXCHANGE RATE UNCERTAINTY AND DUOPOLY COMPETITION By Anas A. Ahmed A DISSERTATION Submitted to the Faculty of the University of Miami in partial fulfillment of the requirements for the degree of Doctor of Philosophy Coral Gables, Florida May Author: Anas A. Ahmed. decisions on investment timing, capacity choice, and outsourcing depend on uncertainty of future demand or output price. Therefore, these decisions require the uncertainty to be taken into account, i.e., the real-options approach. The real-options approach, or investment under uncertainty, was summarized by Dixit and Pindyck [5].

    The present paper adopts a real options approach to value wind power investments under uncertainty. Flexibility arises from the possibility to defer the construction of a wind farm until more information is available, the alternative to abandon the investment and the options to select the scale of the project and up-scale the project.   Evolving electricity markets and technology often lead to uncertainty for resource planners, making capacity investment decisions challenging. The increasing affordability of .

    effect of salvage market on strategic technology choice and capacity investment decision of firm under demand uncertainty Journal of Business Economics and Management, Vol. 17, No. 1 Sourcing Strategies and Supplier Incentives for Short-Life-Cycle GoodsCited by: CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): In this paper, we embed the microeconomic decisions associated with investment under uncertainty, capacity utilization, and machine replacement in a general equilibrium model based on putty-clay technology. We show that the combination of log-normally distributed idiosyncratic productivity uncertainty and Leontief.


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Investment, capacity, and uncertainty by Simon Gilchrist Download PDF EPUB FB2

Investment, Capacity, and Uncertainty: A Putty-Clay Approach1 Simon Gilchrist Boston University, Federal Reserve Bank of Boston, and NBER Bay State Road Boston, MA [email protected] and John C. Williams Federal Reserve Bank of San Francisco Economic Research Market Street San Francisco, CA [email protected] May In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the Investment investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are by: We embed the microeconomic decisions associated with investment under uncertainty, capacity utilization, and machine replacement in a general equilibrium model based on putty-clay technology.

In the presence of irreversible factor proportions, a mean-preserving spread in the productivity of investment raises aggregate investment, productivity Cited by: We embed the microeconomic decisions associated with investment under uncertainty, capacity utilization, and machine replacement in a general equilibrium model based on putty-clay technology.

In the presence of irreversible factor proportions, a mean-preserving spread in the productivity of investment raises aggregate investment, productivity, and output. While in a slowly growing or shrinking market, the exible follower produces up to capacity right after investment. In the intermediate case, the exible follower produces up to capacity right after investment when uncertainty is low and below capacity when uncertainty is Size: 1MB.

" Investment, capacity, and uncertainty: a putty-clay approach," Working Paper SeriesFederal Reserve Bank of San Francisco, revised References listed on IDEAS HTML HTML with abstract plain text plain text with abstract BibTeX RIS (EndNote, RefMan, ProCite) ReDIF JSON Mark Bagnoli & Ted Bergstrom, The optimal investment threshold capacity USD in dependence of time under full investment with capacities c = [, 1, ] for varying degrees of uncertainty σ =σ =σ =σ =and σ = low capacity (grey dashed line), medium capacity (solid line), high capacity (dotted line).Cited by: 9.

where a firm has to determine optimal investment timing and optimal capacity choice at the same time under conditions of irreversible investment expenditures and uncertainty in future demand. After the project is installed with a certain maximum capacity, this capacity is fixed as an upper boundary to the output and cannot be adjusted later on.

ItFile Size: KB. The firm optimizes both its capacity investment under demand uncertainty and its sourcing of funds from a competitive investor. Ours is the first study of this problem to adopt an optimal contracting approach: feasible sources of funds are derived endogenously from fundamentals and include standard financial claims (debt, equity, convertible Cited by: 2.

dedicated) and capacity investment decisions. Specifically, we model two firms competing with each other in two markets characterized by price-dependent and uncertain demand. The firms make three decisions in the following sequence: choice of technology (technology game), capacity investment (capacity game), and production quantities (production game).

The technology and capacity games Cited by: (). Port capacity investment size and timing under uncertainty and congestion. Maritime Policy & Management: Vol. 47, No. 2, pp. Cited by: 2. investor, the leader, always producing up to full capacity and a second investor, the follower, capable.

of adjusting output levels within the constraint of installed capacity. Both rms need to decide on the.

investment timing and the investment capacity : Xingang Wen. Investment thresholds, sizes of capacity installed and utilization rates for different structures of investment cost, levels of uncertainty and degrees of upside volume flexibility.

The degree of downside volume flexibility is set to b D = The remaining parameter values are those displayed in Table by: 4. Matteo Balliauw, Hilde Meersman, Eddy Van de Voorde and Thierry Vanelslander, Towards improved port capacity investment decisions under uncertainty: a real options approach, Transport Reviews, /, (), ().Cited by: capacity investment under demand uncertainty: the role of imports in the u.s.

cement industry guy meunier jean-pierre ponssard catherine thomas cahier n° ecole polytechnique centre national de la recherche scientifique departement d'economie route de saclay palaiseau cedex (33) 1.

Due to the uncertainty in the investment process, improper choice of investment opportunities or capacity will bring about great risks.

In order to control risks, this paper investigates a real option model and applies option game method to analyze the investment timing and capacity choice problem under stochastic market by: 1. Get this from a library. Investment, capacity, and uncertainty: a putty-clay approach.

[Simon Gilchrist; John C Williams; National Bureau of Economic Research.]. Investment Under Uncertainty book. Read 2 reviews from the world's largest community for readers. How should firms decide whether and when to invest in n /5. With respect to investment in electricity generation, many studies investigate regulatory uncertainty (Cambini and Rondi, ;Mulder, ;Roques et al., ) but do not provide a more general.

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.

"Irreversible Investment, Capacity Choice, and the Value of the Firm," American Economic Review, American Economic Association, vol. 78(5), pagesDecember. Pindyck, Robert S., " Irreversible investment, capacity choice, and the value of the firm," Working papersMassachusetts Institute of Technology (MIT), Sloan School.Investment, Capacity, and Uncertainty: A Putty-Clay Approach.

[Simon Gilchrist; John C Williams] -- We embed the microeconomic decisions associated with investment under uncertainty, capacity utilization, and machine replacement in a general equilibrium model based on putty-clay technology.tings, including capacity investment, revenue management, and supply chain coordination.

These problems share one characteristic in common: decision postponement, and as such, are all modeled as two-stage stochastic programming problems. In the first stage, a set of decisions are made under uncertainty so as to maximize the expected profit or.