Rapid technological developments are inducing the shift in consumer demand from existing products towards new alternatives. When operating in a declining market, the profitability of incumbent firms is largely dependent on the ability to correctly time the introduction of product innovations....

Private companies (PCs) in restructured infrastructure industries, e.g., energy and transportation, determine facility investment timing and sizing. Such decisions maximize the PC's expected profit (rather than social welfare) under uncertainty. By anticipating the PC's incentives, a...

This paper considers investment problems in real options with non-homogeneous two-factor uncertainty. It shows that, despite claims made in the literature, the method used to derive an analytical solution in one dimensional problems cannot be straightforwardly extended to problems with two...

Carbon Capture and Storage (CCS) and Carbon Capture and Utilization (CCU) are considered essential solutions to reduce greenhouse gas (GHG) emissions worldwide. A crucial difference between the two is that CCS is already a mature technology, while CCU is still in the R&D phase. Hence, firms are...

We study the optimal decision to undertake a preventive investment by a firm operating in a market with uncertain demand and whose products are subject to a risk of malfunction. It has an incentive to do so because malfunctions have two negative effects on its revenue. First, every malfunction...

Models of investment under uncertainty mostly concern the firm's stochastic environment as exogenously given and subject to constant characteristics. We consider a firm that can sequentially invest to alter the growth rate of a project through a revenue-enhancing pre-investment activity prior to...