TY - JOUR
T1 - The value of fighting irreversible demise by softening the irreversible cost
AU - Magis, Paul
AU - Sbuelz, Alessandro
PY - 2006
Y1 - 2006
N2 - 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.
AB - 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.
KW - Cost irreversibility
KW - Demise irreversibility
KW - Double barrier options
KW - Technology innovation
KW - Cost irreversibility
KW - Demise irreversibility
KW - Double barrier options
KW - Technology innovation
UR - http://hdl.handle.net/10807/22330
UR - http://www.scopus.com/record/display.url?eid=2-s2.0-33745470223&origin=resultslist&sort=cp-t&src=s&imp=t&sid=z4uavjjp22-1kyc4j2u44o_%3a130&sot=inw&sdt=a&sl=39&s=au-id%28%22sbuelz%2c+alessandro%22+14025119600%29&relpos=1&relpos=1&searchterm=au-id%28\%22sbuelz,%20alessandro\%22%2014025119600%29
U2 - 10.1142/S021902490600372X
DO - 10.1142/S021902490600372X
M3 - Article
SN - 0219-0249
VL - 9
SP - 503
EP - 516
JO - International Journal of Theoretical and Applied Finance
JF - International Journal of Theoretical and Applied Finance
ER -