Managerial flexibility has value in the context of uncertain R&D projects,as management can repeatedly gather information about uncertain project and market characteristics and, based on this information,change its course of action.This value is now well accepted and referred to as real option...

This article develops a model of a project as a payoff function that depends on the state of the world and the choice of a sequence of actions. A causal mapping, which may be incompletely known by the project team, represents the impact of possible actions on the states of the world. An...