We consider investment decisions in a discrete time, two-stage real option game where firms move sequentially, in the context of a Public-Private Partnership (PPP) problem. The value of the option depends on the market structure which we assume to be either a monopoly or a Bertrand differentiated duopoly. We show that, in an equilibrium where no firm invests in the first period, a government intervention, in form of a subsidy, can improve the welfare level.

On the welfare and policy implications of a two-period real option game / Wang, Congcong; Chen, Shanshan; Wang, Yuhan; Pansera, Bruno Antonio; Luckraz, Shravan. - In: SOCIO-ECONOMIC PLANNING SCIENCES. - ISSN 0038-0121. - 90:(2023). [10.1016/j.seps.2023.101717]

On the welfare and policy implications of a two-period real option game

Pansera, Bruno Antonio
Formal Analysis
;
2023-01-01

Abstract

We consider investment decisions in a discrete time, two-stage real option game where firms move sequentially, in the context of a Public-Private Partnership (PPP) problem. The value of the option depends on the market structure which we assume to be either a monopoly or a Bertrand differentiated duopoly. We show that, in an equilibrium where no firm invests in the first period, a government intervention, in form of a subsidy, can improve the welfare level.
2023
Real Options, Policy Implications, Decision, Common goods
File in questo prodotto:
File Dimensione Formato  
Pansera_2023_S-EPS_Welfare_editor.pdf

solo utenti autorizzati

Tipologia: Versione Editoriale (PDF)
Licenza: Tutti i diritti riservati (All rights reserved)
Dimensione 1.31 MB
Formato Adobe PDF
1.31 MB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/20.500.12318/141926
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 1
  • ???jsp.display-item.citation.isi??? 1
social impact