Investment under uncertainty: a review essay

Article Abstract:

Avinash Dixit and Robert Pindyck's 'Investment Under Uncertainty' focuses on the concept that irreversible investment coupled with ongoing timing flexibility and uncertainty can substantially affect the investment decision rule utilized by a company seeking to maximize its profits. A significantly higher analytical level was achieved via the study of irreversibility with dynamic programming and contingent claims methods, which have undergone development since the 1970s.

Uncertainty

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Public investment, private investment, and inflation

Article Abstract:

The relationship between social investment and inflation is discussed along with the effect of private capital on such a relationship. When public investment falls, private investment may increase over a short span of time as long as the elasticity of substitution is not very big. Inflation is predicted to occur in the short term when both private and social investment produce the same level of output.

Inflation (Finance), Inflation (Economics)

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Investments in flexible production capacity

Article Abstract:

A study was done to analyze the production technology and capacity decision problem of firms. These firms are assumed to produce various outputs and face stochastic demands. The study presents the capacity problem as a singular stochastic control problem, equates firm value with current capital and future capacity value and defines an investment maximizing rule for the firm's market value.

Capital investments

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