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Long run value stabilization in a real options perspective

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  • A. Mantovi

Abstract

The present value of growth opportunities with stable long run value and decreasing investment cost is addressed in a real options perspective. The model is solved in terms of closed form solutions, and a duality between elementary real options of waiting to invest is conjectured to be a fundamental structure of a forthcoming theory of real options. A pure capital budgeting perspective is pursued. Natural lines for future research are accounted for.

Suggested Citation

  • A. Mantovi, 2009. "Long run value stabilization in a real options perspective," Economics Department Working Papers 2009-EP01, Department of Economics, Parma University (Italy).
    • Handle: RePEc:par:dipeco:2009-ep01
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    References listed on IDEAS

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    More about this item

    Keywords

    PVGO; real options; strategic investment; learning;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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