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Price Caps for Standard Offer Service: A Hidden Stranded Cost

✍ Scribed by Frank Graves; Paul Liu


Publisher
Elsevier Science
Year
1998
Tongue
English
Weight
414 KB
Volume
11
Category
Article
ISSN
1040-6190

No coin nor oath required. For personal study only.

✦ Synopsis


The use of call option techniques demonstrates that the flexibility offered by standard offer service can be a nontrivial fraction of total stranded costs. The right price cap structure can ameliorate this cost.