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dc.contributor.authorDi Corato, Lucaen_US
dc.date.accessioned2010-11-18en_US
dc.date.accessioned2010-12-22T10:44:22Z-
dc.date.available2010-12-22T10:44:22Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/43576-
dc.description.abstractA government bargains a mutually convenient agreement with a multinational corporation to extract a natural resource. The corporation bears the initial investment and earns as a return a share on the profits. The host country provides access and guarantee conditions of operation. Being the investment totally sunk, the corporation must account in its plan not only for uncertainty on market conditions but also for the threat of nationalization. In a real options framework where the government holds an American call option on nationalization we show under which conditions a Nash bargaining is feasible and leads to attain a cooperative agreement maximizing the joint venture surplus. We find that the threat of nationalization does not affect the investment time trigger but only the feasible bargaining set. Finally, we show that the optimal sharing rule results from the way the two parties may differently trade off rents with option value.en_US
dc.language.isoengen_US
dc.publisherFondazione Eni Enrico Mattei (FEEM) Milanoen_US
dc.relation.ispartofseriesNota di lavoro // Fondazione Eni Enrico Mattei: Institutions and Markets 2010,5en_US
dc.subject.jelC7en_US
dc.subject.jelD8en_US
dc.subject.jelK3en_US
dc.subject.jelF2en_US
dc.subject.jelO1en_US
dc.subject.ddc330en_US
dc.subject.keywordReal Optionsen_US
dc.subject.keywordNash Bargainingen_US
dc.subject.keywordExpropriationen_US
dc.subject.keywordNatural Resourcesen_US
dc.subject.keywordForeign Direct Investmenten_US
dc.subject.stwRohstoffressourcenen_US
dc.subject.stwRohstoffwirtschaften_US
dc.subject.stwDirektinvestitionen_US
dc.subject.stwBergrechten_US
dc.subject.stwBergbaupolitiken_US
dc.subject.stwVerstaatlichungen_US
dc.subject.stwInvestitionsrisikoen_US
dc.subject.stwNash-Gleichgewichten_US
dc.titleProfit sharing under the threat of nationalizationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn640183158en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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