Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/43565
Authors: 
Dosi, Cesare
Moretto, Michele
Year of Publication: 
2010
Series/Report no.: 
Nota di lavoro // Fondazione Eni Enrico Mattei: Institutions and markets 2010,24
Abstract: 
Exclusive rights, like mineral leases and radio spectrum licences, often hold option-like features. This occurs when licencees do not face the obligation to to develop the lease or to undertake the investment required to use the assigned spectrum. However, to avoid licences being unused for lengthy periods, regulators sometimes set time limits, after which the exclusive right of exercise may be revoked, prior to its term, because of inaction. This paper looks at the potential impact of 'use or lose' provisions upon the private time of investment. We find that these provisions may either increase or reduce the probability of early investment, depending on the risk of losing the licence and the expectations about on-going deployment costs.
Subjects: 
Licences
Real Options
Use or Lose Provisions
Time of Investment
JEL: 
L51
D44
D92
Document Type: 
Working Paper

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