..., the optimal decision is made by taking into account the optimal decisions in the subsequent nodes of that part of the tree. option value Arrow K J Dixit A K Fisher A C Henry C net present value NPV Pindyck R S Black F McDonald R Scholes M Siegel D Bolton P Harris C Rothschild M “two armed bandit...

...This concluding chapter summarizes the principles set forth in this volume. It argues that the discount rate is a key parameter in economics because it determines how our societies value their future. The chapter aims to use the discount rate in the net present value (NPV) decision rule: to find...