Let the slaughter value of the goose be s. Let the net present value of all future eggs be t. A simple approach to valuing the goose might be assumed to be Max(s,t). I have a feeling it is likely more complex. Thoughts?

Bradley Thomas
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  • The Golden Goose belongs to folklore, not mathematics. – Parcly Taxel Dec 02 '20 at 03:35
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    It depends on the actual model. It is not clear what "net present value" means. That phrase suggests the value can change, but no model for how it changes was given. It is not clear if $s$ can change, either. For example, why can't we wait for 10 years, obtain some fraction of $t$, and then kill the goose to receive that fraction plus $s$? This would give a value pretty close to $s+t$. If we want to get closer we can wait 20 years. – Michael Dec 02 '20 at 03:36
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    This is valuing a productive resource with a scrap value. Look at Dixit and Pindyck, Investment Under Uncertainty, for much detail, for example, what if the return is random? Per @Michael, it explicitly addresses the optimal time to slaughter the goose. – Trurl Dec 07 '20 at 19:13

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