Google full text of our books:


Investment under Uncertainty
Avinash K. Dixit & Robert S. Pindyck

Hardcover | 1994 | $99.95 | £48.00 | ISBN: 9780691034102
488 pp. | 6 x 9 1/4 | 75 line illus.
Add to Shopping Cart

eBook | ISBN: 9781400830176 |
Our eBook editions are available from these online vendors

graduation-capTextbooks & e-Inspections for Professors

Endorsements | Table of Contents

Google full text of this book:

How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending.

This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.


"[The authors'] approach has powerful implications for investors in marketable assets as well. No investment professional or CFO can afford to ignore this brilliant new book."--Peter L. Bernstein, author of Capital Ideas: The Improbable Origins of Modern Wall Street

"Avinash Dixit and Robert Pindyck have successfully applied to capital budgeting the ideas and techniques of option pricing that have so enriched our understanding of financial markets."--Merton H. Miller, Nobel Laureate in Economics

Table of Contents:

1 A New View of Investment 3
2 Developing the Concepts Through Simple Examples 26
3 Stochastic Processes and Ito's Lemma 59
4 Dynamic Optimization under Uncertainty 93
5 Investment Opportunities and Investment Timing 135
6 The Value of a Project and the Decision to Invest 175
7 Entry, Exit, Lay-Up, and Scrapping 213
8 Dynamic Equilibrium in a Competitive Industry 247
9 Policy Intervention and Imperfect Competition 282
10 Sequential Investment 319
11 Incremental Investment and Capacity Choice 357
12 Applications and Empirical Research 394
References 429
Symbol Glossary 445
Author Index 449
Subject Index 455

Subject Areas:

Shopping Cart options:

  • For ebooks:

Our eBook editions are available
from these online vendors:

  • Amazon Kindle Store
  • Apple iBooks
  • Barnes & Noble Nook Store
  • Google Play eBook Store
  • Kobo eBook Store
  • Many of our ebooks are available through
    library electronic resources including these platforms:

  • Books at JSTOR
  • Ebrary
  • Ebook Library
  • EBSCO Ebooks
  • MyiLibrary
  • Dawsonera (UK)

    • For hardcover/paperback orders in United States, Canada, Latin America, Asia, and Australia

     Hardcover : $99.95 ISBN: 9780691034102

    Add to shopping cart
    View contents of your shopping cart

    • For hardcover/paperback orders in Europe, Africa, the Middle East, India, and Pakistan

     Hardcover  £48.00 ISBN: 9780691034102

    Add to shopping cart
    View contents of your shopping cart


    Need textbooks? View our textbook site.

    Teaching Professors: To request a print examination copy for course consideration, please visit: Ingram Academic. Inspection copies are only available to verified university faculty. Some restrictions apply.

    To request an electronic inspection copy for course use consideration, please visit one of the following services to submit your digital examination request online:

  • VitalSource™
  • Digital Comps
  • Kortext
  • Yuzu

    To purchase an electronic textbook for course use, please visit one of these vendors:

  • VitalSource™
  • Perusall
  • Chegg
  • RedShelf
  • Yuzu

  • Prices subject to change without notice

    File created: 7/11/2017

    Questions and comments to:
    Princeton University Press

    New Book E-mails
    New In Print
    PUP Blog
    Princeton APPS
    Sample Chapters
    Princeton Legacy Library
    Exam/Desk Copy
    Recent Awards
    Princeton Shorts
    Freshman Reading
    PUP Europe
    About Us
    Contact Us
    PUP Home

    Bookmark and Share 
    Send me emails
    about new books in:
    Political Science And International Relations
    More Choices