Crunch time: the optimal policy to avoid the "Announcement Effect" when terminating a subsidy

Abstract: "We are considering for examination an Irreversible Investment under Uncertainty, subsidized by the government. If the government announces the termination of a form of subsidization, investors may decide to realize their investment in order to obtain the subsidy. These investors might have postponed an investment if future payment were assured. Depending on the degree of uncertainty and the time preference, the termination of said subsidy may cost the government more in toto than granting the subsidy on a continuing basis. We would like to show that a better strategy is to cut the subsidy in parts rather than terminate the subsidy in its entirety." [author's abstract]

Object Details

• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource, 10 S.
• Language: Englisch
• Notes: unbekannt

References and Relationships

• Bibliographic citation: IF Working Paper Series ; Bd. FW24V2

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Veröffentlichung
• (where): Braunschweig
• (when): 2006
• Creator: Gürtler, Marc ; Sieg, Gernot
• Contributor: Technische Universität Braunschweig, Department Wirtschaftswissenschaften, Institut für Finanzwirtschaft

Further information

• URN: urn:nbn:de:101:1-2019072011455360993878
• Rights: Open Access unbekannt; Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 15.08.2025, 7:33 AM CEST