TY - BOOK
T1 - Retrospective insights from real options in R&D
AU - Lint, L.J.O.
PY - 2000
Y1 - 2000
N2 - Absent empirical validation of real option pricing in R&D, we discuss the evolution of three cases in R&D option valuation. The first case concerns an option on conversion of an existing production process. The other two cases concern R&D to develop new product technology in the consumer electronics market. To keep the analogy with financial options transparent, option valuation of R&D is generally based on a static view of the technology under consideration, and the main focus is on the value of waiting to invest under (exogenous) market uncertainty. We find, however, that the dynamics of the technology under consideration played a dominant role in the cases that we studied. Our study seems to be the first attempt to give some detailed descriptions ofoption valuation in a real R&D setting throughout time.
AB - Absent empirical validation of real option pricing in R&D, we discuss the evolution of three cases in R&D option valuation. The first case concerns an option on conversion of an existing production process. The other two cases concern R&D to develop new product technology in the consumer electronics market. To keep the analogy with financial options transparent, option valuation of R&D is generally based on a static view of the technology under consideration, and the main focus is on the value of waiting to invest under (exogenous) market uncertainty. We find, however, that the dynamics of the technology under consideration played a dominant role in the cases that we studied. Our study seems to be the first attempt to give some detailed descriptions ofoption valuation in a real R&D setting throughout time.
M3 - Report
T3 - ECIS working paper series
BT - Retrospective insights from real options in R&D
PB - Eindhoven Centre for Innovation Studies (Ecis)
CY - Eindhoven
ER -