Introduction of Multi — Stage Evaluation in IT Research and Development Project on Real Options
Considering the option characteristics of IT R&D investments,this paper introduced real options concept to analyze and evaluate R&D project investments in IT industry,and set up a model of the lattice binomial decision trees to solve the evaluation problems existing in multi-stage investments.It also proposed a compoud options approach to analyze the option value of R&D project with considering the uncertainty of technique,expected profit flow,and multi-stage contribution of R&D project.Moreover,this paper divided R&D project into three stages,including pre-experiment,large-scale research and commercialization,and then offered a multi-stage pricing model by using lattice binoamial decision trees for computering the option value of R&D investment.It also discussed the defect of this pricing model because of the high-evaluation error since the next options value was viewed as the profit return of the current option,and proposed an improvement to this model as well.Finally an example of the value evaluation for an IT R&D investment project was given to demonstrate the application.
Real option binomial tree multi-stage evaluation compound options R&D IT
LIU Xiaoying FANG Weiguo
School of Economics and management Beihang University,,Beijing,100083
国际会议
2007 International Conference on Management Science and Engineering(2007管理科学与工程国际学术会议)
河南焦作
英文
2565-2571
2007-08-20（万方平台首次上网日期，不代表论文的发表时间）