Pursuing the wrong options? Adjustment costs and the relationship between uncertainty and capital accumulation

C-Tier
Journal: Economics Letters
Year: 2011
Volume: 111
Issue: 3
Pages: 249-251

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

Abel and Eberly (1999) prove that uncertainty has an ambiguous effect on long run capital accumulation in a real options model. We show that, with adjustment costs quadratic in investment, more uncertainty reduces capital and this effect may be large.

Technical Details

RePEc Handle
repec:eee:ecolet:v:111:y:2011:i:3:p:249-251
Journal Field
General
Author Count
3
Added to Database
2026-01-29