Optimal funding and hiring/firing policies with mean reverting demand

C-Tier
Journal: Economic Modeling
Year: 2016
Volume: 58
Issue: C
Pages: 569-579

Authors (3)

Bouasker, O. (not in RePEc) Letifi, N. (not in RePEc) Prigent, J.-L. (Université de Cergy-Pontoise)

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze the firm's investment and hiring/firing optimal strategies when the market demand is mean reverting and with potential decision reversibility. In this framework, we determine the values of both investment and hiring/firing growth and shutdown options. This allows the extension of Tserlukevich (2008) and Letifi and Prigent (2014) when taking account of a mean reverting demand. We analyze the quasi-explicit solutions for the optimal firm's value, especially the influence of mean-reverting parameters on both the growth and decay options.

Technical Details

RePEc Handle
repec:eee:ecmode:v:58:y:2016:i:c:p:569-579
Journal Field
General
Author Count
3
Added to Database
2026-01-29