Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53183 
Year of Publication: 
2009
Series/Report no.: 
Nota di Lavoro No. 84.2009
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
In a continuous-time framework we study the technology and investment choice problem of a continuous co-digestion biogas plant dealing with randomly fluctuating relative convenience of input factor costs. Input factors enter into the productive process together mixed according to a given initial rule. Being inputs relative convenience stochastically evolving, a successive revision of the initial rule may be desirable. Hence, when the venture starts the manager may or may not install a flexible technology allowing for such option. Investment is irreversible and flexibility is costly. The problem is solved determining in the light of future prospects the optimal revision and then playing backward fixing the investment timing rule.
Subjects: 
Factor Proportions
Technological Choice
Flexibility
Real Options
Alternative Energy Source
JEL: 
C61
D24
Q42
Document Type: 
Working Paper

Files in This Item:
File
Size
492.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.