Spreadsheet TOM 2025.xlsx

	B	C	D	E	F	H	I	J	K	L	M	N	O	P	R	S	T	U	V	W	X	Y	Z	AB	AC	AD	AE	AF	AG	AH	AI	AJ	AL	AM	AN
1
2
3
4
5
6																																	Ci	Net return in business i in a particular time (index for time omitted)
7																																	Cj	Net return in business j in a particular time (index for time omitted)
8																														n
9																														1	2	3	l = 1	The firm continues to have both businesses, i and j
10																										Ci	10	l	1				l = 2	The firm uses the switching option and redeploys all resources from business j to business i
11																								pu	0.5				2				l = 3	The firm uses the abandonment option and divests business j
12																										Cj	16		3
13																					n												n = 1	The firm continued to have both businesses, i and j
14																					1	2	3										n = 2	The firm used the switching option and redeployed all resources from business j to business i
15																	Ci	10	l	1													n = 3	The firm used the abandonment option and divested business j
16															pu	0.5				2
17																	Cj	14		3													S	2	Total switching cost
18												n																		n			γ	0.1	Marginal abandonment cost
19												1	2	3																1	2	3	r	0	Risk-free interest rate for discounting over time
20								Ci	10	l	1													pd	0.5	Ci	10	l	1				n	1	Initial condition: the firm enters the model having been in both businesses, i and j
21						pu	0.5				2																		2
22								Cj	12		3													pu	0.5	Cj	12		3
23					n																n
24					1																1	2	3
25	Ci	10	l	1											pd	0.5	Ci	10	l	1
26				2																2
27	Cj	10		3											pu	0.5	Cj	10		3
28												n																		n
29												1	2	3																1	2	3
30								Ci	10	l	1													pd	0.5	Ci	10	l	1
31						pd	0.5				2																		2
32								Cj	8		3													pu	0.5	Cj	8		3
33																					n
34																					1	2	3
35																	Ci	10	l	1
36															pd	0.5				2
37																	Cj	6		3
38																														n
39																														1	2	3
40																										Ci	10	l	1
41																								pd	0.5				2
42																										Cj	4		3
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100