ON SUPPLY SIDE OPTION VALUE

In this paper the ability to sign supply-side option value is studied. The compensating and equivalent option prices are defined, and it is argued that equivalent option price is the preferred welfare measure. In the absence of income risk, if the probability distribution of supply is degenerate either with or without the project, one-way test of project acceptance can be established.


Issue Date:
1989
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/13341
Total Pages:
20
Series Statement:
Staff Paper P89-10




 Record created 2017-04-01, last modified 2017-08-23

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