This paper develops a model of farmer decision-making to examine the extent to which uncertainties about the performance of site-specific technologies (SSTs) and about the weather impact the value of these technologies. The model uses the jointly estimated risk and technology parameters to...

Many investment decisions of agribusiness firms such as when to invest in an emerging market or whether to expand the capacity of the firm involve irreversible investment and uncertainty about demand, cost or competition. This paper uses an option-value model to examine the factors affecting an...

This paper develops theoretical and empirical models to understand how farmers formulate their participation strategies when deciding to enroll in the Conservation Reserve Program (CRP) under uncertainty. A theoretical model is employed to obtain the impacts of various factors on the optimal...

This paper examines the optimal location of a competitive firm in response to environmental costs imposed by the abatement investment and taxes when the cost of the environmental regulation varies spatially under uncertainty. It contributes to the literature by incorporating the spatial setting...

This paper develops a framework to link the expected utility analysis to real options models in order to capture the joint effects of risk aversion and irreversibility associated with real investments. It aims at modifying the theory of investment under uncertainty by incorporating decision...

An option-value model is developed to analyze the impacts of output price uncertainty, high sunk costs of adoption, and site-specific conditions on the optimal timing of adoption of two interrelated site-specific technologies, soil testing and variable rate technology (VRT). The model...