Publications:

• Evaluating the optimal timing and capacity of investments in flexible combined heat and power generation for energy-intensive industries. - with Giorgia Oggioni

Annals of Operations Research, 2023. 

The paper shows that operational flexibility guarantees earlier investment in flexible cogeneration systems but has an ambiguous effect in terms of capacity.

• Investment in farming under uncertainty and decoupled support: a real options approach. - with Luca Di Corato

European Review of Agricultural Economics, 2022. 

The paper shows that decoupled payments (i) induce earlier investment with lower productive capacity; (ii) increase the value of the investment option associated with land and (iii) reduce the volatility of farm income. 

• The dynamics of preemptive and follower investments with overlapping ownership. - with Richard Ruble

Journal of Economic Dynamics and Control, 2021.

The paper shows that overlapping ownership arrangements delay follower entry implying longer incumbency which intensifies the race to lead.

• Excess returns in Public-Private Partnerships: Do governments pay too much? - with Michele Moretto and Marco Buso

Economic Modelling, 2021.

The paper discusses the optimal design of Public Private Partnerships under moral hazard when the private party has bargaining power.

• Investing in electricity production under a reliability options scheme. - with Fulvio Fontini and Tiziano Vargiolu

Journal of Economic Dynamics and Control, 2021.

The paper shows that reliability options can have adverse effects on investment timing and value. 

• Jointly Held Investment Options and Vertical Relationships.

Review of Industrial Organization, 2021.

The paper shows that the optimal time for exercising a jointly held investment option depends on the bargaining power distribution between the option holders as well as the upstream market power. The latter is always prevailing.

• The effect of vertical relationships on investment timing. - with Rossella Agliardi

International Game Theory Review, 2021.

The paper discusses the effect of demand and investment cost uncertainty as well as upstream market power on investment timing. 

• Investments under vertical relations and agency conflicts: a real options approach.

International Review of Economics & Finance, 2020.

The paper discusses the effect of downstream information asymmetries on upstream suppliers.

Working Papers:

• Strategic capacity investment with common ownership, with Richard Ruble and Domenico De Giovanni, 

R&R (a preliminary version is available here)

The paper studies how common ownership (CO) affects the magnitude and dynamics of investments in a duopoly. If firm roles are exogenous, CO leads to an efficient outcome involving staged investments. If firm roles are endogenous, CO drives the winner of the preemption race to take a toehold so as to concede a monopoly position to the follower. In all cases CO is detrimental to consumer surplus and welfare.

• Investment under uncertainty and the threat of nationalization, 

R&R (a preliminary version is available here)

The paper discusses how the threat of nationalization affects the timing and scale of foreign investments, and how do these two factors impact the exercise of the nationalization option on the host country side. I show that an increase in the nationalization risk, e.g. due to lower sanctions towards the local government, will result in underinvestment, both in terms of timing and in terms of scale, as well as hastened nationalization. Hence the threat of nationalization leads to premature and undersized investments, rather than deterring them entirely.