Investment Under Uncertainty: Keeping One's Options Open.

The article comments on the book "Investment Under Uncertainty," by Avinash K. Dixit and Robert S. Pindyck. The book discusses modern options for analyzing individual and business decisions, particularly on investment decisions. The following decision making models are explored in the book: uncertainty models, dynamic programming, stochastic process and neoclassical investment model. Applied analyses of neoclassical investment models fall into two categories. The first follows the user cost of capital approach. The second, compares the replacement cost of a marginal investment to its capitalized value.