The theory of real options is used to incorporate the influence of uncertainty on demographic decision-making. The decision to have children is formulated as an investment using portfolio theory. The timing of the decision to have a child is modelled as a real options decision, with uncertainty affecting a woman’s ability to exercise the doption to waitT in order to delay or space births. An in...

Existing research has used real options theory to study corporate venture capital (CVC) investment, yet little work has empirically examined such investment in a comparative setting. In this paper, we begin to address this gap by investigating firms’ investment mode choice between CVC and acquisition, which are alternative modes for pursuing external business development and corporate growth. W...

Traditional project investment methods, such as the discounted cash flow (DCF) with a fixed static plan, are no longer sufficient to assist the corporate strategies of seizing opportunities and profitability. The option pricing formula includes a theoretical framework for pricing financial options, assuming that the risk in a financial hedged position is zero, if the option is adjusted continuo...

The cash flows of technology-based companies show high degrees of uncertainty. As traditional valuation methods can hardly capture these characteristics, they are insufficient for valuing these kinds of companies. On the contrary, real options theory can quantify the value associated with management flexibility, growth opportunities, and synergies. This chapter assesses the corporate value of a...

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...