How to escape a declining market: capacity investment or exit?

DOI10.1016/J.EJOR.2016.04.009MaRDI QIDQ323283zbMATH OpenOpenAlexFDO

Authors Verena Hagspiel, Kuno J. M. Huisman, Peter M. Kort, Cláudia Nunes

Publication date 7 October 2016

Published in European Journal of Operational Research (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/j.ejor.2016.04.009

zbMATH Keywords

capacity investmentinvestment analysisreal optionsdeclining marketexit

Mathematics Subject Classification ID

Brownian motion (60J65) Production theory, theory of the firm (91B38)

Recommendations

• Invest or exit? Optimal decisions in the face of a declining profit stream
• Live or let die? alternative routes to industry exit
• Productivity or unexpected demand shocks: what determines firms' investment and exit decisions?
• Capacity expansion and replacement in growing markets with uncertain technological breakthroughs
• Market entry, phased rollout or abandonment? A real option approach
• Mature or emerging markets: competitive duopoly investment decisions
• Capacity investment timing by start-ups and established firms in new markets
• Capacity market design options: a dynamic capacity investment model and a GB case study

Cites work

• A Modification of the Sequential Probability Ratio Test to Reduce the Sample Size
• Adoption of uncertain multi-stage technology projects: a real options approach
• Choosing among alternative discrete investment projects under uncertainty
• Diffusions and Elliptic Operators
• Invest or exit? Optimal decisions in the face of a declining profit stream
• Investment and capacity choice under uncertain demand
• Investment and the Valuation of Firms When There is an Option to Shut Down
• On the properties of \(r\)-excessive mappings for a class of diffusions
• Optimal technology adoption when the arrival rate of new technologies changes
• Optimal timing of technology adoption
• Paul Wilmott on quantitative finance. 3 Vols. With CD-ROM
• Properties of American option prices
• Resource Flexibility with Responsive Pricing
• Strategic technology choice and capacity investment under demand uncertainty
• The net present value method versus the option value of waiting: A note on Farzin, Huisman and Kort (1998)

Cited in

(14)

• Investment in two alternative projects with multiple switches and the exit option
• Rescaling-contraction with a lower cost technology when revenue declines
• Model risk in real option valuation
• Leaving well-worn paths: reversal of the investment-uncertainty relationship and flexible biogas plant operation
• Capacity investment choices under cost heterogeneity and output flexibility in oligopoly
• Technology adoption in a declining market
• Production processes with different levels of risk: addressing the replacement option
• Hysteresis due to irreversible exit: addressing the option to mothball
• Green electricity investments: environmental target and the optimal subsidy
• The solution to a differential-difference equation arising in optimal stopping of a jump-diffusion process
• Invest or exit? Optimal decisions in the face of a declining profit stream
• The optimal stopping problem revisited
• The interaction of debt financing, cash grants and the optimal investment policy under uncertainty
• The effects of asset liquidity on dynamic sell-out and bankruptcy decisions

This page was built for publication: How to escape a declining market: capacity investment or exit?

Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q323283)