The Dixit–Pindyck and the Arrow–Fisher–Hanemann–Henry option values are not equivalent: a note on Fisher (2000)

Fisher (2000, this journal) offers a unifying framework for the concepts of quasi-option value, suggested by Arrow, Fisher, Hanemann, and Henry (AFHH), and the concept of real option value, suggested by Dixit and Pindyck (DP). He claims that the two concepts are equivalent. We argue that this claim is not correct. We further suggest a decomposition of the DP option value into two components, one of which corresponds exactly to the AFHH quasi-option value which captures the value of obtaining new information, and a second one which captures the postponement value irrespective of uncertainty.