La valutazione della flessibilit? nel servizio idrico integrato

Chiara D'Alpaos and Michele Moretto

ECONOMIA PUBBLICA, 2005, vol. 2005/3, issue 3

Abstract: La valutazione della flessibilit? nel servizio idrico integrato (di Chiara D'Alpaos e Michele Moretto) - ABSTRACT: We analyse the optimal investment strategy of a monopolist firm, which has subscribed some sort of concession contract to provide a public utility, i.e. water service. We present a strategic model in which a monopolist firm chooses both the timing of the investment and the capacity. We focus not only on the value of the immediate investment, but rather on the value of the investment opportunity. We then extend the model to two interdependent projects, where undertaking the first project provides the opportunity to acquire at maturity the benefits of the new investment by making a new outlay. We show that flexibility to defer an investment may generate, ceteris paribus, additional profits, which may induce positive effects in terms of consumers surplus.

Date: 2005
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