This paper presents a tractable model of a firm that chooses both the scale and timing of its investment. The value-maximizing investment policy is lumpy, and sensitivity analysis shows that greater demand volatility is associated with the firm choosing to invest in larger increments, less...

Regulated firms are exposed to asset-stranding risk whenever allowed revenue depends on past capital expenditure: if demand falls far enough, past expenditure is unrecoverable. I show that such regulation induces firms to invest in more capital, but distorts the trade-off between investment...

Enormous public investment will occur as communities adapt to climate change. Much of this investment will be irreversible and the future benefits are currently uncertain. The real options embedded in adaptation projects are therefore potentially important and their existence needs to be...

This paper investigates whether uncertainty of contest outcome and match quality matter to television viewers of New Zealand National Provincial Championship (NPC) rugby matches. To date, nearly all uncertainty of outcome studies have focused on live match attendance. Furthermore, these studies...