Download full text
(external source)
Citation Suggestion
Please use the following Persistent Identifier (PID) to cite this document:
https://hdl.handle.net/10419/55256
Exports for your reference manager
Crunch time: the optimal policy to avoid the "Announcement Effect" when terminating a subsidy
[working paper]
Corporate Editor
Technische Universität Braunschweig, Department Wirtschaftswissenschaften, Institut für Finanzwirtschaft
Abstract "We are considering for examination an Irreversible Investment under Uncertainty, subsidized
by the government. If the government announces the termination of a form of subsidization,
investors may decide to realize their investment in order to obtain the subsidy. These investors might
have postp... view more
"We are considering for examination an Irreversible Investment under Uncertainty, subsidized
by the government. If the government announces the termination of a form of subsidization,
investors may decide to realize their investment in order to obtain the subsidy. These investors might
have postponed an investment if future payment were assured. Depending on the degree of uncertainty
and the time preference, the termination of said subsidy may cost the government more in toto
than granting the subsidy on a continuing basis. We would like to show that a better strategy is to cut
the subsidy in parts rather than terminate the subsidy in its entirety." [author's abstract]... view less
Classification
Financial Planning, Accountancy
Economic Policy
Free Keywords
irreversibility; investments; announcement effect; subsidies
Document language
English
Publication Year
2006
City
Braunschweig
Page/Pages
10 p.
Series
IF Working Paper Series, FW24V2
Handle
https://hdl.handle.net/10419/55256
Status
reviewed
Licence
Deposit Licence - No Redistribution, No Modifications
Data providerThis metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne