We analyse the effect of differing uncertainty assumptions on the costs of shareholder-bondholder conflicts arising from partially debt-financed investments. A partial equilibrium model, valid for a large class of diffusion processes, is developed and then applied to the specific cases of a...

Purchasing goods from distant locations introduces a significant lag between when a product is shipped and when it arrives. These transit lags are trade barriers for firms facing volatile demand, who must place orders before knowing the resolution of demand uncertainty. We provide a model in...

The implementation of enterprise systems has facilitated the development of shared data environments within organizations and conjointly the capability for broader based management control systems (MCS). Yet, several studies have found that most organizations have experienced little change in...

Stochastic budgeting is used to simulate the business and financial risk and the performance over a six-year planning horizon on a Norwegian dairy farm. A major difficulty with stochastic whole-farm budgeting lies in identifying and measuring dependency relationships between stochastic...

This study applies a real option approach to quantify, ex-ante, the maximum incremental social tolerable irreversible costs that would justify immediate adoption of Bt maize in France. Based on field trials, we find that incremental private reversible benefits in the agricultural sector are -18...

In Build-Operate-Transfer (BOT) infrastructure projects, host governments often provide subsidies, guarantees or alternative forms of support as incentives to attract private sector participation. A guaranteed level of minimum revenue, for example, can be specially designed to alleviate the...