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A Fuzzy Real Options Model for R&D Project Evaluation

Christer Carlsson, Robert Fullér, Péter Majlender, A Fuzzy Real Options Model for R&D Project Evaluation. In: G.Chen Y.Liu, M.Ying (Eds.), Proceedings of the Eleventh IFSA World Congress, 1650-1654, Tsinghua University Press and Springer, 2005.

Abstract:

A major advance in development of project
selection tools came with the application of options reasoning
to R&D. The options approach to project valuation seeks
to correct the deficiencies of traditional methods of valuation
through the recognition that managerial flexibility can bring
significant value to a project. The main concern is how to deal
with non-statistical imprecision we encounter when judging
or estimating future cash flows. In this paper we develop a
model for valuing options on R&D projects, when future cash
flows and expected costs are estimated by trapezoidal fuzzy
numbers.

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BibTeX entry:

@INPROCEEDINGS{inpCaFuMa05c,
  title = {A Fuzzy Real Options Model for R&D Project Evaluation},
  booktitle = {Proceedings of the Eleventh IFSA World Congress},
  author = {Carlsson, Christer and Fullér, Robert and Majlender, Péter},
  editor = {Y.Liu, G.Chen and M.Ying},
  publisher = {Tsinghua University Press and Springer},
  pages = {1650-1654},
  year = {2005},
  keywords = {Fuzzy number, real option valuation},
}

Belongs to TUCS Research Unit(s): Other

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