Huisman, Kuno; Kort, Peter; Plasmans, J.E.J. - Tilburg University, Center for Economic Research - 2007
This paper considers a representative firm taking investment decisions in a high-tech environment where different … generations of products are invented over time. First, we develop a real options investment model in which, according to standard … of investment the increased production capacity goes along with increasing production cost and decreasing price, (ii) a …