ESSAYS ON INVESTMENT DECISIONS UNDER UNCERTAINTY

This dissertation aims at modelling uncertainty and deriving managerial implications in different areas. Due to uncertainty and limited information, a firm may encounter difficulties in decision making and sometimes make wrong decision. For this reason, I provide models to incorporate uncertainty, investigate the impacts of the uncertainty, and provide more appropriate decisions and new interpretations.More specifically, this dissertation studies investment decision problems under uncertainty in negotiation, outsourcing vs. joint venture contract, investment of dual channel and portfolio optimization (Chapter 2, 3, 4, and 5, respectively). To model uncertainty in four areas, two methodologies are considered in this dissertation. For the first three chapters, the real option theory which became widely used in both academia and practice is applied to study uncertainty. For the portfolio optimization, a robust optimization method is used.