Option Game Pricing Model of R&D Alliances with Sequential Investment

摘要：

The paper deyeloped a real option game valuation model of R&D alliances with uncertainty involving irreversible sequential investment under option contract. Since there exists moral hazard in R&D alliances, option contracts are an appropriate instrument for resolving the double moral hazard problem of both partners, and the option contract strictly dominates other governance structures in R&D alliances. This paper gives the investment valuation formulas of firm A and B in R&D alliances under option contract, and comparative static analysis with respect to key parameters. These findings should serve as a more accurate valuation model in R&D alliances to avoid overvaluation.

关键词： R&D alliances Sequential investment Option game Option contract Moral hazard.

作者: Xue Minggao

作者单位: Department of Finance, School of management, Huazhong University of Science and Technology, P.R.China, 430074

会议类型: 国际会议

会议名称: 第六届管理学国际会议(Proceedings of ICM2007 the 6th International on Management)

会议地点: 武汉

会议语种:英文

页码: 722-728

在线出版日期: 2007-08-03（万方平台首次上网日期，不代表论文的发表时间）