We develop a model for determining the optimal timing and capacity choice of investment under floors and ceilings (collars). We study how a welfare maximizing finite-lived collar can be optimally designed. Our findings show that for a linear demand function, multiple collar arrangements are...

This paper presents a real options model to value the option to invest in a new project, whose value is contingent on two multiplicative stochastic factors behaving accordingly to correlated geometric Brownian motions. A general sensitivity analysis is conducted highlighting the importance of...

We study the combined effects of revenue and cost uncertainty as well competition on the timing optimization of investments in complementarity inputs for duopoly markets where either spillover-knowledge is allowed or where proprietary-knowledge holds. For some input-sequencing investment...