Optimal investment sequence

Ping-shu Tso (), Koon-lam Shea () and Tai-man Tang ()
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Ping-shu Tso: School of Business, The University of Hong Kong, HONG KONG
Koon-lam Shea: School of Economics and Finance, The University of Hong Kong, HONG KONG
Tai-man Tang: Department of Mathematics, The University of Hong Kong, HONG KONG

Economic Theory, 2000, vol. 15, issue 1, 215-219

Abstract: This paper investigates the optimal order in which a collection of projects should be taken on if only one project can be done at a time. We associate a number called priority value with each project and show that one should order the projects in decreasing priority values. We also show that this priority value rule is equivalent to the replication rule in the literature. Finally, we compare the rankings given by the priority value rule and the ordinary present value rule.

Keywords: Present value; Replication; Investment sequence. (search for similar items in EconPapers)
Date: 1999-11-22
Note: Received: April 23, 1997; revised version: July 15, 1998.
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