Results 11 to 20 of about 70 (70)
Valuing Modularity as a Real Option [PDF]
Management Science, 2009 We provide a general valuation approach for capital budgeting decisions involving the modularization in the design of a system. Within the framework developed by Baldwin and Clark (Baldwin, C. Y., K. B. Clark. 2000. Design Rules: The Power of Modularity.
Andrea Gamba, Nicola Fusari
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ARE REAL OPTIONS "REAL"? ISOLATING UNCERTAINTY FROM RISK IN REAL OPTIONS ANALYSIS [PDF]
Annals of Financial Economics, 2014 This paper derives an adjusted Black–Scholes pricing formula. In separating risk and uncertainty using the robust control technique, we find that both uncertainty and risk raise management's subjective evaluation of real options. We suggest a simple method to filter the risk of the project and to acquire a more reliable value of real options without ...
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Some of the next articles are maybe not open access.
Journal of Comparative Economics, 2008
Many privatization objects have characteristics of real options in the sense that a substantial investment is required in order to make the asset productive while at the same time there is uncertainty about the future value of the asset. This paper explores several auction designs for the privatization of such assets and shows how government revenues ...
Enrico Pennings, Enrico Pennings
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Many privatization objects have characteristics of real options in the sense that a substantial investment is required in order to make the asset productive while at the same time there is uncertainty about the future value of the asset. This paper explores several auction designs for the privatization of such assets and shows how government revenues ...
Enrico Pennings, Enrico Pennings
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Real Options for Playstation [PDF]
SSRN Electronic Journal, 2007 In 1973, Black, Scholes and Merton published two path-breaking papers on rational pricing of financial options, the right, but not the obligation, to buy or sell a stock in the future at a given price. This new approach to the evaluation of financial projects vividly inspired the academic community: over eleven thousands papers have been published on ...
Giampiero Favato, Roger W. Mills
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Real Options and Real Tradeoffs
Academy of Management Review, 2004The commentaries on our article fail to come to grips with the distinct challenges raised by a process of experimentation that leads to the discovery of new possible initiatives. These challenges differ from those posed by an investment that provides privileged access to a prespecified set of possible follow-on investments. By treating these challenges
Ron Adner, Daniel A. Levinthal
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Real options and real strategies
Strategic Change, 2007Abstract The formulation of strategic plans within the real options framework promotes flexibility and provides an answer to critics of conventional strategic planning who argue that the deterministic and inflexible nature of that process might leave managers ill‐prepared to cope with uncertainty.
Stefanos Zarkos +2 more
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Real Options for Real Ventures [PDF]
SSRN Electronic Journal, 2004 Black-Scholes is useful for valuing real options, but not in the way often used for new ventures. The use rests on an apparent analogy between real and stock options. Although conceptually helpful, a direct analogy is flawed for most real ventures. The most critical flaw is the assumption that the variance in new venture outcomes is a continuous time ...
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SSRN Electronic Journal, 2017
Suppose a project manager is developing a product and wishes to sell it to a particular buyer who learns over time whether the product is profitable. I analyze situations like this with a real options model in which the seller of an asset has private information about its quality and can either wait (and incur a flow cost), exit the market, or upgrade ...
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Suppose a project manager is developing a product and wishes to sell it to a particular buyer who learns over time whether the product is profitable. I analyze situations like this with a real options model in which the seller of an asset has private information about its quality and can either wait (and incur a flow cost), exit the market, or upgrade ...
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Real Options and Risk Aversion [PDF]
, 2013 In the standard real options approach to investment under uncertainty, agents formulate optimal policies under the assumptions of risk neutrality or complete financial markets. Although these assumptions are crucial to the implications of the approach, they are not particularly relevant to most real world environments where agents face incomplete ...
Hugonnier, Julien N., Morellec, Erwan
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To kill a real option – Incomplete contracts, real options and PPP
Transportation Research Part A: Policy and Practice, 2012This paper is concerned with the implications of public–private partnership agreements for the execution of expansion options in road infrastructure. More specifically, it analyzes the expansion of an existing two-lane road in Sweden, and examines the real options created by an intermediate type of road with three lanes.
Niclas A. Krüger, Niclas A. Krüger
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