Publication Type
Working Paper
Version
publishedVersion
Publication Date
11-2011
Abstract
We extend the Arrow-Fisher-Hanemann-Henry (AFHH) and Dixit-Pindyck (DP) option values to game situations. By reinterpreting the AFHH option value as a change in the surplus from conservation because of the prospect of future information, we deal with the conceptual difficulty associated with the AFHH option value in the presence of strategic interactions. We then introduce the DP option value into a game situation. We show that the equivalence between the expected value of information and the DP option value in the standard model does not hold under strategic interactions.
Keywords
Irreversibility, Quasi-option values, Biodiversity, Uncertainty, Value of Information
Discipline
Behavioral Economics | Strategic Management Policy
Research Areas
Applied Microeconomics
Volume
13-2011
First Page
1
Last Page
14
Publisher
SMU Economics and Statistics Working Paper Series, No. 13-2011
City or Country
Singapore
Citation
FUJII, Tomoki and ISHIKAWA, Ryuichiro.
Arrow-Fisher-Hanemann-Henry and Dixit-Pindyck option values under strategic interactions. (2011). 13-2011, 1-14.
Available at: https://ink.library.smu.edu.sg/soe_research/1314
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Comments
Published in Strategic Behavior and the Environment, 2013, https://doi.org/10.1561/102.00000028