Expected time to invest in a new location

Couto, Gualter; Nunes, Cláudia; Silva, Bruno

http://hdl.handle.net/10400.3/4808

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Authors

Couto, Gualter

Nunes, Cláudia

Silva, Bruno

Abstract(s)

In this paper we study the expected time to invest in a new location. In particular we derive expected values of the optimal timing regarding the decision of relocation of a company. We address two classes of scenarios. In the first one we assume that new (and potentially more efficient) spots become available according to a non-homogeneous Poisson process, whereas in the second we assume a conditional Poisson process. For both scenarios we derive mathematical expressions for the expected value of the firm in specific situations, where the intensity function is some particular function. We end up the paper presenting numerical illustrations of the derived results.

Keywords

Poisson Process Relocation

URI

http://hdl.handle.net/10400.3/4808

Citation

Couto, Gualter; Nunes, Cláudia; Silva, Bruno (2008). Expected time to invest in a new location, "Working Paper Series", 13, 24 pp.. Ponta Delgada: Universidade dos Açores, CEEAplA-A.