Investment timing, capacity choice and optimal floors and ceilings

• Tipo: Artigo em Revista Científica Internacional
• Data: 2022

Autores

Paxson, D (Autor) Outra; Paulo Jorge Pereira (Autor) FEP; Rodrigues, Artur (Autor) FEP

Revista

Título: Journal of Economic Dynamics and Control

Vol. 139

ISSN: 0165-1889

Indexação

ISI Web of Knowledge - 5 Citações

Scopus - 5 Citações

Outras Informações

ID Authenticus: P-00W-MM1

DOI: 10.1016/j.jedc.2022.104430

Abstract (EN): We develop a model for determining the optimal timing and capacity choice of investment under floors and ceilings (collars). We study how a welfare maximizing finite-lived collar can be optimally designed. Our findings show that for a linear demand function, multiple collar arrangements are optimal, including pure floors and fixed price regimes. Departing from previous literature, our results suggest that pure ceiling regimes are not optimal. When the demand function is isoelastic, optimal schemes are not attainable.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 27