Capital and Uncertainty: The Capital Investment Process in a Market Economy
This book is an important addition to the emerging body of new work on capital. Its primary contribution is in analysing capital investment choice as a process. the understanding of this process requires some modification and significant extension to the standard neo-classical economic tools. Capital and Uncertainty is a non-mathematical text, modernizing and adding to the existing thought in this area, with insights from game theory, rational choice under uncertainty and new institutional economics. Dr Runge also draws upon 25 years of business experience in setting out a thorough and immensely practical exposition of the risk/return trade-off and how major capital investment decisions are made within firms.
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The nature of capital investment decisions
Choice risk and uncertainty
13 other sections not shown
actor assessment associated assumed assumption behaviour capital investment choice capital investment decisions capital value cent chance ceteris paribus change in expected Chapter characteristics characterized choice alternatives choice problem choice process choice set choice under uncertainty concept contestable market copper cost of capital cost of production curve decision problem decision-making defined differentiate distribution economic elements entrepreneurial choice entrepreneurial profits entrepreneurship environment envisaged evaluation examined example expected return expected utility model expected value favour Figure firm future higher impact individual influence institutions intertemporal valuation involves iteration less loss in value marginal cost marginal revenue market value market-based mechanism neoclassical model offtake opportunity cost output present value private value rational choice reduce represents reservation criterion reservation line reservation utility result return on investment risk aversion rules satisfy the reservation scope secondary capital strategy subjective expected utility sunk costs temporal utility model theory trucks understood variability viable Whilst