The DOI matches its Crossref record.
The Value of Waiting to Invest
Open accessAbstract
This paper studies the optimal timing of investment in an irreversible project where the benefits from the project and the investment cost follow continuous-time stochastic processes. The optimal investment rule and an explicit formula for the value of the option to invest are derived, assuming that the option is valued by risk-averse investors who are well diversified. The same analysis is applied to the scrapping decision. Simulations show that this option value can be significant, and that for reasonable parameter values it is optimal to wait until benefits are twice the investment costs.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cited by
Operating Flexibility, Global Manufacturing, and the Option Value of a Multinational Network
Kogut, B., & Kulatilaka, N. (1994) · Management Science · doi:10.1287/mnsc.40.1.123 · Cited by 1,131
Political Uncertainty and IPO Activity: Evidence from U.S. Gubernatorial Elections
Çolak, G., Durnev, A., & Qian, Y. (2017) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109017000862 · Cited by 486
Pre-Event Trends in the Panel Event-Study Design
Freyaldenhoven, S., Hansen, C., & Shapiro, J. M. (2019) · American Economic Review · doi:10.1257/aer.20180609 · Cited by 427
Policy Uncertainty, Persistence and Growth*
Aizenman, J., & Marion, N. P. (1993) · Review of International Economics · doi:10.1111/j.1467-9396.1993.tb00012.x · Cited by 359
Christou, C., Cunado, J., Gupta, R., & Hassapis, C. (2017) · Journal of Multinational Financial Management · doi:10.1016/j.mulfin.2017.03.001 · Cited by 267
Metadata
- Authors
- McDonald, R., & Siegel, D.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 1986-11
- Volume
- 101
- Issue
- 4
- Pages
- 707
- ISSN
- 0033-5533 (ISSN-L)
- OpenAlex
- W2033739349
- Cited by
- 3,596
- References
- 0
- FWCI
- 3.76
- Type
- journal article
- Language
- en
- Open access
- green
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: The Value of Waiting to Invest. https://app.cochat.ai/papers/10.2307/1884175
- The paper
- McDonald, R., & Siegel, D. (1986). The Value of Waiting to Invest. The Quarterly Journal of Economics. https://doi.org/10.2307/1884175
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
