scholarly journals A Duopoly Real Option Model with Capacity Competition

2008 ◽  
Vol 1 (0) ◽  
pp. 19-45
Author(s):  
Guang Chen ◽  
Shunichi Maekawa
Keyword(s):  
Real Option ◽  
Option Model

COMPUTING COMPETENCIES VALUE THROUGH A FUZZY REAL OPTION MODEL

2004 ◽  
Vol 09 (01) ◽  
Author(s):  
Lorella Cannavacciuolo ◽  
Luigi Iervolino ◽  
Luca Iandoli ◽  
Giuseppe Zollo
Keyword(s):  
Real Option ◽  
Option Model

Airfare price insurance: a real option model

2011 ◽  
Vol 12 (1) ◽  
pp. 5-14 ◽  
Author(s):  
Adishwar K. Jain ◽  
Raymond A.K. Cox
Keyword(s):  
Real Option ◽  
Option Model ◽  
Price Insurance

scholarly journals Investment strategy for shallow geothermal resource based on real option model

2019 ◽  
Vol 158 ◽  
pp. 6118-6125 ◽  
Author(s):  
Chen Siyuan ◽  
Zhang Qi ◽  
Tang Yanyan ◽  
Li Hailong ◽  
Liu Boyu
Keyword(s):  
Real Option ◽  
Investment Strategy ◽  
Geothermal Resource ◽  
Option Model

scholarly journals Firm Regulation and Profit Sharing: A Real Option Approach

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Michele Moretto ◽  
Paola Valbonesi
Keyword(s):  
Real Option ◽  
Infinite Horizon ◽  
Profit Sharing ◽  
Price Adjustment ◽  
Recent Experience ◽  
Key Factors ◽  
Real Option Approach ◽  
Option Model ◽  
Utilities Regulation

Abstract To avoid the extremely high profit levels found in the recent experience of public utilities' regulation, some regulators have introduced a profit-sharing (PS) rule that revises prices to the benefit of consumers. However, in order to be successful, a PS rule should satisfy appropriate incentive conditions.In this paper, we study the incentive properties of a second best PS mechanism designed by the regulator to induce a regulated monopolist to divert its "excessive" profits to the customers. In a real option model where a regulated monopolist manages a long-term franchise contract and the regulator has the option to revoke the contract if there is serious welfare loss, we first endogenously derive the welfare maximising PS rule under the verifiability of profits. We then explore the dynamic efficiency of this PS rule under the non-verifiability of profits and study the firm's incentive to comply with it in an infinite-horizon game. Finally, we derive the price adjustment path which follows the adoption of a PS rule in a price cap regulation.We show that the riskiness of the distribution of the firm's future profits and the regulator's cost in revoking the franchise contract are key factors in determining the equilibrium properties of a dynamic PS rule.

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