IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v31y2024i20p2182-2187.html
   My bibliography  Save this article

Investment timing and quantity under uncertainty and asymmetric information

Author

Listed:
  • Wenhe Song
  • Shou Chen

Abstract

We extend an investment model with demand uncertainty and asymmetric information on investment costs. The manager of firms has more investment costs information than the owner. Meanwhile, demand uncertainty that firms always face after investment. We develop a dynamic model that captures the joint effect of uncertainty and asymmetric information on investment timing and quantity. The results show that the risk effect dominates the uncertainty effect on the investment threshold and quantity. The uncertainty and degree of asymmetric information have opposite effects on investment. Moreover, the risk effect dominates the uncertainty effect, while the risk and the degree of asymmetric information are synergistic effects.

Suggested Citation

  • Wenhe Song & Shou Chen, 2024. "Investment timing and quantity under uncertainty and asymmetric information," Applied Economics Letters, Taylor & Francis Journals, vol. 31(20), pages 2182-2187, November.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:20:p:2182-2187
    DOI: 10.1080/13504851.2023.2212953
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2023.2212953
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2023.2212953?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:31:y:2024:i:20:p:2182-2187. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.