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Long-term risk management of nuclear waste: A real options approach. (English) Zbl 1009.91040

Summary: We investigate the optimal timing for deep geological disposal of nuclear waste. Our model is based on the real options approach to investment under uncertainty. In this context, the problem is similar to the optimal exercise policy for a perpetual American spread option. The potential usefulness of such a model for actual decision-making on a sensitive issue is illustrated by some numerical simulations.

MSC:

91B74 Economic models of real-world systems (e.g., electricity markets, etc.)
91G50 Corporate finance (dividends, real options, etc.)
91G20 Derivative securities (option pricing, hedging, etc.)
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