Technology innovations continue to be one of the greatest drivers of economic growth. Realizing the value of such innovations, however, requires substantial follow-on investments in development and commercialization. The value of these investments is difficult to capture due to uncertain demand...

We present a simple analysis of the generic flexibility to switch between alternative technologies or operating quot;modes.quot; The firm can select between alternative projects based on inflexible (rigid) technologies, or a flexible project that allows for switching the operating mode, possibly...

The Financial Accounting Standards Board has recently endorsed a proposal that will require firms to calculate and recognize as a cost of compensation the value of employee stock options at the time those options are granted. Conventional models such as the Black and Scholes or binomial models,...

We study investment timing under uncertainty and imperfect competition. The real options literature studies investment timing when (a) the firm has a monopoly over an investment opportunity, and (b) the product market is perfectly competitive. As a result, firms tend to postpone investment as...

Developing a technology standard requires significant upfront investment. The value of a new technology depends on how it is deployed (whether proprietary use or licensing) and is uncertain at the time of investment. Hence, the rules governing investments in technology development must be...

There is a growing trend by established firms to use a multitude of External Corporate Venturing (ECV) mechanisms (alliances, partnerships, joint ventures, acquisitions, licensing agreements and investments in corporate venture capital) to acquire external innovations. In this paper, we develop...

We provide a strategic rationale for growth options under uncertainty and imperfect competition. In a market with strategic competition, investment confers a greater capability to take advantage of future growth opportunities. This strategic advantage leads to the capture of a greater share of...