Irreversible investment, uncertainty, and ambiguity: The case of bioenergy sector - Archive ouverte HAL Accéder directement au contenu
Article Dans Une Revue Energy Economics Année : 2012

Irreversible investment, uncertainty, and ambiguity: The case of bioenergy sector

Pierre-André Jouvet
  • Fonction : Auteur
Caroline Orset Orset

Résumé

We analyze production and investment decisions of an agent in industrial activities that are characterized by two forms of uncertainty: demand uncertainty (in terms of number of buyers) and competitive effect uncertainty (in terms of other energy resource). We apply our model on the bioenergy industries. We compare the case of an ambiguity neutral agent with that of an ambiguity averse agent. We show that the investment decision of an agent depends on the effects of both the capital investment and the level of production on the cost and the uncertainty the agent is confronted with. Moreover, we find that ambiguity aversion tends to decrease the agent's optimal levels of production and investment. Our numerical analysis of the French case illustrates the different effects associated with demand uncertainty and competitive effect uncertainty.
Fichier principal
Vignette du fichier
Bioenergy_Revised_2.pdf (397.08 Ko) Télécharger le fichier
Origine : Fichiers produits par l'(les) auteur(s)
Loading...

Dates et versions

hal-01500840 , version 1 (18-04-2017)

Identifiants

Citer

Pierre-André Jouvet, Elodie Le Cadre, Caroline Orset Orset. Irreversible investment, uncertainty, and ambiguity: The case of bioenergy sector. Energy Economics, 2012, 34 (1), pp.45-53. ⟨10.1016/j.eneco.2011.08.018⟩. ⟨hal-01500840⟩
149 Consultations
156 Téléchargements

Altmetric

Partager

Gmail Facebook X LinkedIn More