Terminating an Ongoing R&D Project under Uncertainty
The paper analyzes market and technological uncertainty of R&D project and presents a multistep quadranomial option pricing model of evaluating an ongoing R&D project. R&D project is viewed as a series of continue/abandon investment options to value managerial flexibility in deciding at each stage in R&D whether to proceed further or stop development. Managerial flexibility has value in the context of uncertain R&D projects, as management can repeatedly gather information about uncertain technical and market characteristics and, based on this information, change its course of action. The model take into account flexible management value of an R&D project, and investment opportunity value of R&D project is proposed as the criterion to decide the project go or not. By comparing R&D project investment value of different flexible decision, the model optimizes decision when unforeseen information comes.
AI Ming-ye
School of Economics and Management Harbin Engineering University Harbin, P.R.China
国际会议
4th Conference on System Science,Management Science & System Dynamics(第四届系统科学、管理科学&系统动力学国际会议)
上海
英文
1-7
2010-12-10（万方平台首次上网日期，不代表论文的发表时间）