Two Essays on the Domain Translation from Financial Options to Real Options PDF Download
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Author: Hongyan Chen
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 242
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Book Description
"Real options (ROs) extend the financial option pricing theory to the valuation of real asset investment and managerial flexibility under uncertainty. However, differences between financial and non-financial rnarkets, and the cornplex real world environment of applications, build obstacles for the domain translation from financial options to ROs. This dissertation is motivated by the challenges of domain translation and developed in two essays. The first essay studies the incentive function of ROs (named the RO incentive). The essay develops an option-game framework to model the RO incentive, examines the change of investment behavior caused by the RO incentive, and values the collaboration improvement. A general framework for designing RO incentives is also developed in the essay for different forms of public-private partnerships (PPPs). The second essay focuses on dynamic capacity expansions, a representative RO application, and analyzes important factors of RO practices for the problem. These include economies of scale, capacity expansion mode, opportunity cost of waiting, terminal value of expansions, and capacity cap. Theoretical insights are obtained through the analysis, which are able to efficiently support the dynamic expansion decisions and explain observations from the numerical solution. The work of this dissertation has reduced the gap between the option theory and RO practices. It also has built a scientific foundation for exploring advanced RO problems such as the incentive design for multiple (more than two) agents and dynamic capacity planning with resource constraints during a mission"--Abstract Leaf iii.
Author: Hongyan Chen
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 242
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Book Description
"Real options (ROs) extend the financial option pricing theory to the valuation of real asset investment and managerial flexibility under uncertainty. However, differences between financial and non-financial rnarkets, and the cornplex real world environment of applications, build obstacles for the domain translation from financial options to ROs. This dissertation is motivated by the challenges of domain translation and developed in two essays. The first essay studies the incentive function of ROs (named the RO incentive). The essay develops an option-game framework to model the RO incentive, examines the change of investment behavior caused by the RO incentive, and values the collaboration improvement. A general framework for designing RO incentives is also developed in the essay for different forms of public-private partnerships (PPPs). The second essay focuses on dynamic capacity expansions, a representative RO application, and analyzes important factors of RO practices for the problem. These include economies of scale, capacity expansion mode, opportunity cost of waiting, terminal value of expansions, and capacity cap. Theoretical insights are obtained through the analysis, which are able to efficiently support the dynamic expansion decisions and explain observations from the numerical solution. The work of this dissertation has reduced the gap between the option theory and RO practices. It also has built a scientific foundation for exploring advanced RO problems such as the incentive design for multiple (more than two) agents and dynamic capacity planning with resource constraints during a mission"--Abstract Leaf iii.
Author: Jeffrey J. Reuer
Publisher: Emerald Group Publishing
ISBN: 1849504946
Category : Business & Economics
Languages : en
Pages : 520
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Book Description
Examines the ways in which real options theory can contribute to strategic management. This volume offers conceptual pieces that trace out pathways for the theory to move forward and presents research on the implications of real options for strategic investment, organization, and firm performance.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Real options refer to the investment, entry, exit and other strategic decisions of the firm that share three important characteristics: they are irreversible, they are made under uncertainty, and their timing is chosen by the firm. The term `real options' was introduced in 1977 by Stewart Myers in his paper `Determinants of corporate borrowing' that related risky debt holdings to the future investment policy of the firm. The literature on real options has since been active and growing with seminal works by Brennan and Schwartz (1985) on the valuation and optimal timing of the natural resource investments; McDonald and Siegel (1986) on general approach to investment timing and scrapping; Margrabe (1978) on the asset exchange options; Fudenberg and Tirole (1985) on the preemption and equilibrium in the technology adoption games; Pindyck (1988) on capacity choice, and Kulatilaka and Perotti (1998) on strategic growth options under imperfect competition. In the 1990's and 2000's, a number of classical textbooks in real options appeared in print: Dixit and Pindyck (1994), Trigeorgis (1996), Amram and Kulatilaka (1998), and Vollert (2003). In its development the real options literature combines the option pricing framework introduced in Black and Scholes (1973) and Merton (1973) with the research in the specific fields of economics and finance such as capital budgeting and investment policy, corporate debt and agency problems, mergers & acquisitions or game theory. The present work illustrates the application of the real options approach to three economic areas: strategic competition, mergers & acquisitions and international trade. The first chapter discusses the optimal timing of the technology adoption, entry and merger decisions in the industry producing a vertically differentiated product. I solve the model for the monopoly, duopoly and merger (which is equivalent to a monopoly with two products) and outline the equilibrium strategies of the Incumbent and the Entrant.
Author: Johnathan Mun
Publisher:
ISBN: 9781119201618
Category : Real options (Finance)
Languages : en
Pages : 667
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Book Description
Author: Mohamad Afkhami
Publisher:
ISBN:
Category : Energy industries
Languages : en
Pages : 0
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Book Description
Author: Martha Amram
Publisher:
ISBN:
Category :
Languages : en
Pages : 246
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Book Description
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 64
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Book Description
The Bulletin of the Atomic Scientists is the premier public resource on scientific and technological developments that impact global security. Founded by Manhattan Project Scientists, the Bulletin's iconic "Doomsday Clock" stimulates solutions for a safer world.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 64
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Book Description
The Bulletin of the Atomic Scientists is the premier public resource on scientific and technological developments that impact global security. Founded by Manhattan Project Scientists, the Bulletin's iconic "Doomsday Clock" stimulates solutions for a safer world.
Author: Anol Bhattacherjee
Publisher: CreateSpace
ISBN: 9781475146127
Category : Science
Languages : en
Pages : 156
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Book Description
This book is designed to introduce doctoral and graduate students to the process of conducting scientific research in the social sciences, business, education, public health, and related disciplines. It is a one-stop, comprehensive, and compact source for foundational concepts in behavioral research, and can serve as a stand-alone text or as a supplement to research readings in any doctoral seminar or research methods class. This book is currently used as a research text at universities on six continents and will shortly be available in nine different languages.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 64
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Book Description
The Bulletin of the Atomic Scientists is the premier public resource on scientific and technological developments that impact global security. Founded by Manhattan Project Scientists, the Bulletin's iconic "Doomsday Clock" stimulates solutions for a safer world.
