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Received: 2003-11-18
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Research of relationship between uncertainty and investment
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MENG Li, WANG Ding-wei. Research of relationship between uncertainty and investment[J]. Journal of Zhejiang University Science A, 2005, 6(4): 334-338.
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author="MENG Li, WANG Ding-wei",
journal="Journal of Zhejiang University Science A",
volume="6",
number="4",
pages="334-338",
year="2005",
publisher="Zhejiang University Press & Springer",
doi="10.1631/jzus.2005.A0334"
}
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DOI - 10.1631/jzus.2005.A0334
Abstract: This study focuses on revealing the relationship between uncertainty and investment probability through real option model involving investment critical trigger and project earning. Use of Matlab software on the experimental results showing that project earning volatility influences investment probability, led the authors to conclude that this notion is not always correct, as increasing uncertainty should have an inhibiting effect on investment, and that in certain situation, increasing uncertainty actually increases the investment probability and so, should have positive impact on investment.
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