Bibliographic Details
| Title: |
Valuing flexibility: an impulse control framework. |
| Authors: |
Hodder, James E.1, Triantis, Alexander J.1 |
| Source: |
Annals of Operations Research. 1993, Vol. 45 Issue 1-4, p109-130. 22p. |
| Subjects: |
Investments, Operations research, Pricing, Valuation, Cost |
| Abstract: |
This paper presents a general framework for modeling and evaluating investments which involve flexibility to switch between alternative states of operation (for example, different sets of production inputs and outputs). The model employs a contingent claims pricing approach and encompasses previous real option models as special cases. We discuss practical solution techniques for the valuation problem under different assumptions regarding the cost and frequency of switching. [ABSTRACT FROM AUTHOR] |
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| Database: |
Engineering Source |
