Journal Article When Are Real Options Exercised? An Empirical Study of Mine Closings Get access Alberto Moel, Alberto Moel Monitor Corporate Finance, Monitor Group Address correspondence to Peter Tufano, Harvard Business School, Morgan Hall, Soliders Field, Boston, MA 02163, or e-mail: [email protected]. Search for other works by this author on: Oxford Academic Google Scholar Peter Tufano Peter Tufano Harvard Business School and NBER Search for other works by this author on: Oxford Academic Google Scholar The Review of Financial Studies, Volume 15, Issue 1, January 2002, Pages 35–64, https://doi.org/10.1093/rfs/15.1.35 Published: 16 June 2015

In this article, we study a well-known real option: the opening and closing of mines. Using a new database that tracks the annual opening and closing decisions of 285 developed North American gold mines in the period 1988-1997, we find that the real options model is a useful descriptor of mines' opening and shutting decisions. In addition, we find that the decision whether to shut a mine is related to firm-specific managerial factors not normally considered within a strict real options model.