We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a sample of 1, 214 condominium developments in Vancouver, Canada built from 1979-1998. We find that increases in both idiosyncratic and systematic risk lead developers to delay new real estate investments. Empirically, a one-standard deviation increase in the return volatility reduces the probability of investment by 13 percent, equivalent to a 9 percent decline in real prices. Increases in the number of potential competitors located near a project negate the negative relationship between idiosyncratic risk and development. These results support models in which competition erodes option values and provide clear evidence for the real options framework over alternatives such as simple risk aversion.Amazon does not discount the monthly fees of subscription plans. ... Many features, such as the one-time activation fee, are constant across the comparisons that we include in our maximum score objective ... Amazon carries plans from all five national carriers; Cingular, Nextel, Sprint, T-Mobile and Verizon. The smaller carrier EarthLink Wireless offers plans on Amazon in IS of the 22 markets.6 Table l lists the number and ... Amazon uses the zip code to look up your geographic market.
|Title||:||Irreversible Investment, Real Options, and Competition|
|Author||:||Laarni Bulan, Christopher J. Mayer, C. Tsuriel Somerville|