Data/hora: 06/06/2024 13:19:43

Provedor de dados: | 31
País: | United States
Título: | Licences, "Use or Lose" Provisions and the Time of Investment
Autores: | Dosi,   Cesare; Moretto,   Michele.
Data: | 2010-03-25
Ano: | 2010
Palavras-chave: | Licences; Real Options; Use or Lose Provisions; Time of Investment; Financial Economics; L51; D44; D92.
Resumo: | Exclusive rights granted by public authorities, like concessions to develop natural resources or electromagnetic spectrum licences, often have option-like features. However, to avoid licences being unused for lengthy periods, regulators sometimes set time limits, after which the exclusive right of exercise may be revoked. In this paper we analyse the impact of use or lose ("UOL") provisions upon the private time of investment. We find that the risk of losing the licence because of inaction generally increases the probability of early investment. However, when capital costs are expected to decline over time, UOL provisions may involve a "perverse effect", by increasing, rather than reducing, the expected time of investment, with respect to a situation where the date of investment is left entirely to the licencee’s discretion.
Tipo: | Working or Discussion Paper
Idioma: | Inglês
Identificador: | http://purl.umn.edu/59756

Relação:

Fondazione Eni Enrico Mattei (FEEM)&gt;Institutions and Markets Papers

IM

24.2010

Formato: | 24