On Uncertainty, Decision Values and Innovation

Using expected values to simplify decision making under uncertainty

A simulation study examines the impact of a simplification strategy that replaces distributional attribute evaluations with their expected values and uses those expectations in an additive value model. Several alternate simplified forms and approximation approaches are investigated, with results showing that in general the simplified models are able to provide acceptable performance that is fai...

Environment, Uncertainty, and Option Values

2.1 THE BASIC FRAMEWORK....................................................................................................................... 4 2.2 RISK AVERSION.................................................................................................................................... 5 2.3 THE VALUE OF CHANGES IN RISK ......................................................................

Environment, Uncertainty, and Option Values

Decision Making on Open Innovation Websites

Firms are increasingly organizing virtual new product development (NPD) initiatives to solicit ideas and suggestions from external parties such as customers. While virtual NPD provides firms with unprecedented access to external knowledge, the diversity of input and participants also poses challenges to decision making. This study develops the concept of decision openness and examines whether m...

Integrating Real-options Reasoning and the Innovation Diffusion Curve for Decision Making under Uncertainty

Dynamic innovation processes are combined for complex technological advances bring about decision-making under uncertainty. This paper reflects the case of strategic decision-making on a technology development project using real options reasoning. Like investment options in financial markets real options introduce explicit risk measures for possible alternatives. Managerial decisions on innovat...