Flexibility and Adjustment to Information in Sequential Decision Problems

1. Front Matter

   Pages I-VIII

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2. Introduction

   • Armin Schmutzler

   Pages 1-9

3. The Importance of Irreversibility and Learning — Familiar Examples Revisited

   • Armin Schmutzler

   Pages 11-31

4. The Role of Irreversibility and Learning in Sequential Decision Problems — Basic Concepts

   • Armin Schmutzler

   Pages 33-64

5. Determinants of the Optimal Choice in Sequential Decision Problems — The Two-Period Case

   • Armin Schmutzler

   Pages 65-110

6. A T-Period Model of Intertemporal Choice with Irreversibility and Uncertainty

   • Armin Schmutzler

   Pages 111-155

7. Consumption and Savings Decisions of Households

   • Armin Schmutzler

   Pages 157-186

8. Back Matter

   Pages 191-200

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1 The Importance of Irreversibility and Learning - Familiar 11 Bxamples Revisited 1. 1 Neoclassical Investment Models: A Brief Survey 11 1. 1. 1 The Standard Neoclassical Investment Theory Model 13 1. 1. 2 The Investment Model with Adjustment Costs 15 1. 1. 3 The Irreversibility of Investment 17 1. 1. 4 Delivery Lags 18 1. 2 Flexible Manufacturing Systems 22 1. 2. 1 Some Basic Facts about Manufacturing 23 1. 2. 2 The Determinants of the Flexibility of Manufacturing Systems 25 1. 2. 3 Manufacturing as a Multiperiod Choice Problem 28 1. 3 Conclusions 30 2 The Role of Irreversibility and Learning in Sequential Decision Problems - Basic Concepts 33 2. 1 The Two-Period Model without Uncertainty 33 2. 1. 1 The Elements of the Model 34 2. 1. 2 Economic Examples 37 2. 1. 3 Some Basic Results 39 2. 1. 4 Intertemporal Opportunity Costs 42 2. 2 The Two-Period Model with Uncertainty 46 2. 2. 1 The Elements of the Kodel 46 2. 2. 2 Special Cases 50 2. 2. 3 Flexibility and the Value of Information 54 2. 2. 4 An Example: Waiting to Invest 56 2. 3 Switching Costs 59 2. 3. 1 The Extended Model 59 2. 3. 2 An Example: Money Demand as Demand for Flexibility 61 2. 4 Summary and Outlook 63 3 Determinants of the Optimal Choice in Sequential Decision Problems - The Two-Period Case 65 3. 1 The Formulation of the Problem 66 3. 1.

• Capital theory
• Decision problems
• Entscheidungsprobleme
• Environmental Economics
• Investment
• Kapitaltheorie
• Umweltökonomie

• Alfred-Weber-Institut, Universität Heidelberg, Heidelberg, Germany

  Armin Schmutzler

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