An exact solution for the investment and value of a firm facing uncertainty, adjustment costs, and irreversibility

This paper derives closed-form solutions for the investment and value of a competitive firm with a constant-returns-to-scale production function and convex costs of adjustment. Solutions are derived for the case of irreversible investment as well as for reversible investment. Optimal investment is a...

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Veröffentlicht in:	Journal of economic dynamics & control 1997-05, Vol.21 (4), p.831-852
Hauptverfasser:	Abel, Andrew B., Eberly, Janice C.
Format:	Artikel
Sprache:	eng
Schlagworte:	Adjustment costs Economic control Economic dynamics Economic models Economic theory Economies of scale Firm theory Investment Irreversibility Production functions Studies Uncertainty
Online-Zugang:	Volltext
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