We study a novel issue in the real-options-based technology innovation literature by means of double barrier contingent claims analysis. We show how much a firm with the monopoly over a project is willing to spend in investment technology innovation that softens the irreversible cost of accessing the project before its irreversible demise. The answer depends on the project's characteristics and on the effectiveness demanded from technology innovation.
|Numero di pagine||14|
|Rivista||International Journal of Theoretical and Applied Finance|
|Stato di pubblicazione||Pubblicato - 2006|
- Cost irreversibility
- Demise irreversibility
- Double barrier options
- Technology innovation