Abstract
We discuss a couple of important issues in the recent literature on quasi-option value. We show that the assertion that quasi-option value can be negative in a model with independent learning is based on confusion between quasi-option value, which is always positive, and the net benefit of preservation (of a natural environment subject to development), which is not. We also explore the significance of different assumptions about the nature of learning and show that the result that quasi-option value is positive is surprisingly robust.
Original language | English (US) |
---|---|
Pages (from-to) | 183-190 |
Number of pages | 8 |
Journal | Journal of Environmental Economics and Management |
Volume | 14 |
Issue number | 2 |
DOIs | |
State | Published - Jun 1987 |
Externally published | Yes |
ASJC Scopus subject areas
- Economics and Econometrics
- Management, Monitoring, Policy and Law