Optimal Procurement and Investment In New Technologies Under Uncertainty

We study a buyer's optimal investment strategy for new technologies when costs evolve stochastically and are private information to the suppliers. In a continuous time setting, we show how the asymmetric information on the stochastic variables leads to delays in investment compared to the real option benchmark. We also suggest a payment structure that implements the buyer's optimal investment timing as a Vickrey-type auction.

• This seminar is organised due to the job opening of assistant professor we currently have in the Organisation, Strategy and Entrepreneurship group.