Irreversible investment in stochastically cyclical markets

This paper presents a new framework for studying irreversible (dis)investment whena market follows a random number of random-length cycles (such as a high-tech productmarket). It is assumed that a firm facing such market evolution is always unsure aboutwhether the current cycle is the last one, although it can update its beliefs about theprobability of facing a permanent decline by observing that no further growth phasearrives. We show that the existence of regime shifts in fluctuating markets suffices for anoption value of waiting to (dis)invest to arise, and we provide a marginal interpretationof the optimal (dis)investment policies, absent in the real options literature. Thepaper also shows that, despite the stochastic process of the underlying variable has acontinuous sample path, the discreteness in the regime changes implies that the samplepath of the firm s value experiences jumps whenever the regime switches all of a sudden,irrespective of whether the firm is active or not.

A model of collateral, investment and adverse selection

This paper characterizes the relationship between entrepreneurial wealth and aggregate investmentunder adverse selection. Its main finding is that such a relationship need not bemonotonic. In particular, three results emerge from the analysis: (i) pooling equilibria, in whichinvestment is independent of entrepreneurial wealth, are more likely to arise when entrepreneurialwealth is relatively low; (ii) separating equilibria, in which investment is increasing inentrepreneurial wealth, are most likely to arise when entrepreneurial wealth is relatively highand; (iii) for a given interest rate, an increase in entrepreneurial wealth may generate a discontinuousfall in investment.

A-1 Monthly Public Assistance Statistical Report Family Investment Program, November 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, October 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, September 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, August 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, July 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, June 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, May 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, April 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, March 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, February 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, January 2001

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, July - December 2000

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

A-1 Monthly Public Assistance Statistical Report Family Investment Program, January - June 2000

A-1 - Monthly Public Assistance Statistical Report Family Investment Program