Abstract
This short paper provides a rigorous definition for the assertion “an increase of uncertainty harms investment” within the real-options framework. In most cases, the effect of uncertainty on investment depends on the time-horizon considered. For typical parameter configurations, more uncertainty favors investment in the short-run.
| Original language | English |
|---|---|
| Journal | Journal of Economics and Business |
| Volume | 112 (105934) |
| Publication status | Published - 2020 |