In this article, we model money-back guarantees (MBGs) as put options. This use of option theory provides retailers with a framework to optimize the price and the return option independently and under various market conditions. This separation of product price and option value enables retailers...

This article develops a framework to analyze the impacts on resource development of efficient management practices that account for possible resource conserving technological changes. Compared with the traditional management practice ignoring these changes, efficient management may not delay or...

This article presents lessons from the rich adoption literature for the nascent research on adaptation. Individuals' adoption choices are affected by profit and risk considerations and by credit and biophysical constraints. New technologies spread gradually, reflecting heterogeneity among...

The authors extend real option theory to evaluate natural resource development projects that may bring negative net benefits and require costly restoration. Based on a new concept, irreversibility cost, they show that the degree of irreversibility becomes an endogenous choice, rather than an...

This article develops a framework to analyze the impacts on resource development of efficient management practices that account for possible resource conserving technological changes. Compared with the traditional management practice ignoring these changes, efficient management may not delay or...

We investigate a rural household's decision to migrate part or all of its labor to urban areas. Labor migrates only when the expected return passes a hurdle rate that is affected by migration networks. We develop a dynamic model of incomplete information, and characterize the unique pure...

Due to payoff uncertainties combined with risk aversion and/or real options, farmers may demand a premium in order to adopt conservation tillage practices, over and above the compensation for the expected profit losses (if any). We propose a method of directly estimating the financial incentives...

The development of accurate non-point source pollution assessment technologies allows the implementation of more efficient policies than can be undertaken in their absence. This study estimates the value of accurate measurement technology by estimating the gains from implementing a more...