University of Cambridge > Talks.cam > Cambridge Finance Workshop Series > Group-Managed Real Options

Group-Managed Real Options

Add to your list(s) Download to your calendar using vCal

  • UserLorenzo Garlappi (Sauder) World_link
  • ClockThursday 03 June 2021, 13:00-14:00
  • HouseOnline.

If you have a question about this talk, please contact CERF/CF Admin.

We study a standard real-option problem where sequential decisions are made through voting by a group of members with heterogeneous beliefs. We show that, when facing both investment and abandonment timing decisions, the group behavior cannot be replicated by that of a representative ``median’’ member. As a result, members’ disagreement generates inertia—-the group delays investment relative to a single-agent case—-and underinvestment—-the group rejects projects that are supported by a majority of members, acting in autarky. These coordination frictions hold in groups of any size, for general voting protocols, and are exacerbated by belief polarization.

This talk is part of the Cambridge Finance Workshop Series series.

Tell a friend about this talk:

This talk is included in these lists:

Note that ex-directory lists are not shown.

 

© 2006-2021 Talks.cam, University of Cambridge. Contact Us | Help and Documentation | Privacy and Publicity