Real options theory has provided a useful framework for technology investment decision making. Researchers in this area have emphasized the importance of considering the option-like characteristics of IT investment projects. However, unlike financial options, investment in IT projects is typically irreversible: such investment cannot be recovered for other purposes without very costly rework. T...

Most of the literature on real options considers the optimal decision of a firm in isolation from competitors. In reality, however, the actions of competing firms often affect each other’s investment opportunities. We develop a game model where many firms compete for a single investment opportunity. When one of the firms triggers the investment the opportunity is completely lost for the other f...

Past information systems research on real options has focused mainly on evaluating information technology (IT) investments that embed a single, a-priori known option. However, since real options are not inherent in any IT investment, they usually must be planned and intentionally embedded in a target IT investment in order to control various investment-specific risks, just like financial risk m...

In this paper, we develop two models for the valuation of information technology (IT) investment projects using the real options approach. The IT investment projects discussed in this paper are categorized into development and acquisition projects, depending upon the time it takes to start benefiting from the IT asset once the decision to invest has been taken. The models account for uncertaint...

This paper applies real options analytic framework to firms’ investment activity in information security technology and then a dynamic analysis of information security investment is explored by extending Gordon-Loeb (2002). The current research provides how firms have to respond to immediate or remote threat numerically. It shows that although positive drift of threat causes both larger and lat...

Implementing information technology projects requires a calculated process to prevent failure. At the same time application of information technology in organizations faces various potential risks. Exploring information technology environment in organizations reveals the potential risks and provides a structure for comprehensive risk management. There are various methods available for risk mana...

Implementing information technology projects requires a calculated process to prevent failure. At the same time application of information technology in organizations faces various potential risks. Exploring information technology environment in organizations reveals the potential risks and provides a structure for comprehensive risk management. There are various methods available for risk mana...

Based on the theory of real options, this paper establishes a investment decision-making model that could evaluate the development of CCS considering some uncertainties: feed-in tariff, the clean price, carbon price, incentives and subsidies from the government and the progress of technology. This model calculates the investment value of CCS project by studying the binomial tree model of real o...

The information and communication technology (ICT) industry is one of the most capital intensive among the high-technology industries. ICT business analysis, especially after the industry deregulation, has become a difficult task. This study integrates Real Options and Game Theory perspectives and examines multi-period price competition in order to find the optimal ICT business strategy in term...