全球智库信息集成服务系统

Avinash K. Dixit and Robert S. Pindyck,�December 1997

We develop continuous-time models of capacity choice when demand fluctuates stochastically, and the firm\'s opportunities to expand or contract are limited. Specifically, we consider costs of investing or disinvesting that vary with time, or with the amount of capacity already installed. The firm\'s limited opportunities to expand or contract create call and put options on incremental units of capital; we show how the values of these options affect the firm\'s investment decisions.