Work

Dynamic project selection

Year: 2018

Type: article

Abstract: We study a normative model of an internal capital market that a company uses to choose between its two divisions’ projects. Each project's value is initially unknown to all, but can be dynamically learned by the corresponding division. Learning can be suspended or resumed at any time and is costly. We characterize an internal capital market that maximizes the company’s expected cash flow.

Source: Theoretical Economics

DOI: 10.3982/te2379

Authors: Arina Nikandrova, Romans Pancs

Institutions: Birkbeck, University of London, Instituto Tecnológico Autónomo de México

Language: English

Topic: Capital Investment and Risk Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: diamond

OpenAlex ID: W2277365113

FWCI: 1.953

Cites: 26

Cited by: 22

Related to: 10