An application of the real options approach to R&D investment decision making in a service division of an energy firm

2011 ◽  
Vol 15 (3/4) ◽  
pp. 218 ◽  
Author(s):  
Nobuhiko Nishimura
Keyword(s):  
Decision Making ◽  
Real Options ◽  
Investment Decision ◽  
The Real ◽  
Real Options Approach ◽  
Investment Decision Making ◽  
D Investment

scholarly journals European Option Based R&D Investment Decision Making under Uncertainties

2015 ◽  
Vol 2015 ◽  
pp. 1-6
Author(s):  
Qing Miao ◽  
Boyang Cao ◽  
Minghui Jiang
Keyword(s):  
Decision Making ◽  
Research And Development ◽  
Joint Venture ◽  
Investment Decision ◽  
Optimal Investment ◽  
European Option ◽  
Project Investment ◽  
Research Joint Venture ◽  
Investment Decision Making ◽  
D Investment

This paper establishes the payoff models of the European option for research and development (R&D) projects with two enterprises in a research joint venture (RJV). The models are used to assess the timing and payoffs of the R&D project investment under quantified uncertainties. After the option game, the two enterprises can make optimal investment decision for the R&D project investment in the RJV.

Analyzing Manufacturer’s R&D Equilibrium in Defense Procurement

2011 ◽  
Vol 474-476 ◽  
pp. 1435-1439
Author(s):  
Sheng Li Chen ◽  
Xiao Dong Liu
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Investment Decision ◽  
Investment Decisions ◽  
Defense Procurement ◽  
Contest Theory ◽  
Investment Decision Making ◽  
Admission Criterion ◽  
The Government ◽  
D Investment

We formulate the model of R&D investment scale adjustment of defense procurement by applying game theory and contest theory and study the equilibrium of manufacturers’ R&D investment decision-making in defense procurement. We explore mainly the influence of valuation of monopolistic contract and differences among manufacturers’ abilities on investment. The conclusion shows that manufacturers’ investment equilibrium of R&D projects is what the government expects under certain conditions, however, manufacturers’ abilities effect on the investment equilibrium and makes it deviate from the government expectation. Therefore, the government must keep practically manufacturers’ anticipation about the monopolistic contact being consistent with government’s and set basic admission criterion to enable manufactures’ ability well-matched to induce the manufacturers’ investment decisions to the investment equilibrium that it desired.

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