We investigate how investment behavior changes when investment is subject to time-to-build versus when it is not. We characterize equilibrium investment strategies under several information structures and compare results to the sorokin a business proposition pdf optimum. We offer some new results.
This behavior is driven by demand uncertainty and capacity constraints. Also, expected outputs are lower than Cournot outputs as firms face uncertainty. Moreover, the amount of uncertainty has different effects over investment types. Check if you have access through your login credentials or your institution. I thank the editor Herbert Dawid, associate editor and two referees for constructive remarks and suggestions. Any human endeavour carries some risk, but some are much riskier than others.
The probability of something happening multiplied by the resulting cost or benefit if it does. The probability or threat of quantifiable damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action. Finance: The possibility that an actual return on an investment will be lower than the expected return. Securities trading: The probability of a loss or drop in value.