Capacity Choice in a Two-Stage Problem Under Uncertainty

David Hennessy

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: When choosing production capacity, a firm may not know which among mutually exclusive projects will be most profitable. It may be possible to await more information before committing given capacity to a project. We identify when shifts in project profitability and firm pecking order increase ex ante optimal capacity choice.

Date: 1999-11-01
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Published in Economics Letters, November 1999, vol. 65, pp. 177-182

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Journal Article: Capacity choice in a two-stage problem under uncertainty (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:1707

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