Working Paper
Endogenous Timing and the Taxation of Discrete Investment Choices
Paolo Panteghini
CESifo, Munich, 2002
CESifo Working Paper No. 723
CESifo, Munich, 2002
CESifo Working Paper No. 723
This article discusses the effects of taxation on the discrete choice of alternative projects. In particular, it is shown that if taxation affects the optimal timing of irreversible investment, then the discrete choice is distorted as well. This result has both methodological and political implications.
CESifo Category
Public Finance
Public Finance
Keywords: effective average tax rate, timing and real options
JEL Classification: H250,H320