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Cited by 600

The DOI matches its Crossref record; 9 of the 9 references it cites were found in a registry or an index.

Optimal Investment with Costly Reversibility

Abel, A. B., Eberly, J. C.·1996·The Review of Economic Studies
DOI 10.2307/2297794
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Abstract

Investment is characterized by costly reversibility when a firm can purchase capital at a given price and sell capital at a lower price. We solve for the optimal investment of a firm that faces costly reversibility under uncertainty and we extend the Jorgensonian concept of the user cost of capital to this case. We define and calculate cU and cL as the user costs of capital associated with the purchase and sale of capital, respectively. Optimality requires the firm to purchase and sell capital as needed to keep the marginal revenue product of capital in the closed interval [cL, cU). This prescription encompasses the case of irreversible investment as well as the standard neoclassical case of costlessly reversible investment.

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Metadata

Authors
Abel, A. B., & Eberly, J. C.
Venue
The Review of Economic Studies
Publisher
Oxford University Press (OUP)
Published
1996-10-01
Volume
63
Issue
4
Pages
581-593
ISSN
  • 0034-6527 (ISSN-L)
  • 1467-937X
DOI
10.2307/2297794
OpenAlex
W2890465795
Cited by
600
References
9
FWCI
10.09
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Optimal Investment with Costly Reversibility. https://app.cochat.ai/papers/10.2307/2297794
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Abel, A. B., & Eberly, J. C. (1996). Optimal Investment with Costly Reversibility. The Review of Economic Studies. https://doi.org/10.2307/2297794

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.