This article describes a methodology for evaluating R&D investment projects using Monte Carlomethods. R&D projects generally involves multiple phases with or without overlapping. R&D investments are made often in a phased manner, with the commencement of subsequent phase being dependent on the...

The aim of this paper is to analyze the equilibrium strategies of two developers in the real estate market, when demands are asymmetric. In particular, the paper considers three key features of the real estate market. First, the cost of redeveloping a building is, at least partially,...

Aim of this paper is to analyse the equilibrium strategies of two firms investing in a new technology, when the probability of successful implementation is uncertain and market shares are asymmetric. In particular, we are able to consider three key feature of a new technology adoption. First, it...

Aim of this paper is to analyse the equilibrium strategies of two developers in the real estate market, when demands are asymmetric. In particular, we are able to consider three key features of the real estate market. First, the cost of redevelop a building is, at least partially, irreversible....

The paper analyses the interaction between investment and financing decisions in a real option framework. In our model, the owner of an undeveloped real estate property (the asset in place) has the option to decide whether and when to develop/abandon his property. We show that debt financing...

One of the problems of using the financial options methodolgy to analyse investment decisions is that strategic considerations become extremely important. So, the theory of real option games combines two successful theories, namely real options and game theory. The value of flexibility can be...

Cooperative investments in R&D are a significant driving force of the modern economy. As it well-known, the R&D investments are uncertain and the strategic alliances create synergies and additional information that increase the success probabilities about R&D projects. The theory of real option...

Exchange options give the holder the right to exchange one risky asset V for another risky asset D. The asset V is referred to as the optioned (underlying) asset, while D is the delivery asset. So, when an exchange option is valued, we generally are exposed to two sources of uncertainity, namely...

This paper provides a real option methodology in order to value a pioneer’s R&D investment opportunity allowing for more potential competitors to enter in the market. To incorporate this competitive dimension, we assume that the pioneer may lose the “competitive dividends”   if the real...