caa a22 4500 397544944 CHVBK 20180915123716.0 cr unu---uuuuu 161202e199610 xx s 000 0 eng 10.2307/2297794 doi (NATIONALLICENCE)oxford-10.2307/2297794 Optimal Investment with Costly Reversibility [Elektronische Daten] [Andrew B. Abel, Janice C. Eberly] Investment is characterized by costly reversibility when a firm can purchase capital at a given price and sell capital at a lower price. We solve for the optimal investment of a firm that faces costly reversibility under uncertainty and we extend the Jorgensonian concept of the user cost of capital to this case. We define and calculate cU and cL as the user costs of capital associated with the purchase and sale of capital, respectively. Optimality requires the firm to purchase and sell capital as needed to keep the marginal revenue product of capital in the closed interval [cL, cU). This prescription encompasses the case of irreversible investment as well as the standard neoclassical case of costlessly reversible investment. © 1996 The Review of Economic Studies Limited Abel Andrew B. The Wharton School of the University of Pennsylvania aut Eberly Janice C. The Wharton School of the University of Pennsylvania aut The Review of Economic Studies Wiley-Blackwell 63/4(1996-10), 581-593 0034-6527 63:4<581 1996 63 restud https://doi.org/10.2307/2297794 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.2307/2297794 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Abel Andrew B. The Wharton School of the University of Pennsylvania aut NATIONALLICENCE 700 1- Eberly Janice C. The Wharton School of the University of Pennsylvania aut NATIONALLICENCE 773 0- The Review of Economic Studies Wiley-Blackwell 63/4(1996-10), 581-593 0034-6527 63:4<581 1996 63 restud Metadata rights reserved CC BY-NC-4.0 http://creativecommons.org/licenses/by-nc/4.0 nationallicence SWISSBIB 074582240 BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-oxford