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Real options in strategic and operational road planning decisions Krüger, Niclas A

By: Publication details: Örebro Infrastructure investment planning under uncertainty. Essay 5, 2009Description: 46 sISBN:
  • 9789176686713
Subject(s): Bibl.nr: VTI 2010.0309Location: Abstract: This essay deals with the infrastructure planning process, where we have a considerable degree of freedom with regard to investment timing and design. This flexibility is an important tool for capturing the benefits from the chances that arise, that is, the positive deviations from what we expect. Essay 5 demonstrates how to value this flexibility and how the nature of the underlying stochastic process influences this value. Moreover, we show how real options have implications for strategic budget allocation decisions and how they may affect contractual agreements between the private and the public sectors.
Item type: Reports, conferences, monographs
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Statens väg- och transportforskningsinstitut Available

This essay deals with the infrastructure planning process, where we have a considerable degree of freedom with regard to investment timing and design. This flexibility is an important tool for capturing the benefits from the chances that arise, that is, the positive deviations from what we expect. Essay 5 demonstrates how to value this flexibility and how the nature of the underlying stochastic process influences this value. Moreover, we show how real options have implications for strategic budget allocation decisions and how they may affect contractual agreements between the private and the public sectors.