Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

2010

Krychowski and Quelin
´

65

Real Options and Strategic Investment Decisions:
Can They Be of Use to Scholars?
by Charlotte Krychowski and Bertrand V
...
In this article we examine an applied
investment decision in the telecommunications industry to highlight the main benefits associated with
using real options
...
Specifically, we
examine two research streams to explain how real options contributes to a theoretical understanding of
strategic management, and to better understand the gap between theory and practice of real options
...


T

he combined effects of globalization, deregulation, and reduced technology cycles result in
managers facing very volatile environments in
their strategic investment decisions
...
Indeed, these methods
assume that a decision is taken once and for all,
without any possibility of modifying the characteristics of the investment project later on
...

The term “real options,” coined by Myers
(1977), corresponds to the application of financial
options theory to investment decisions made by
firms
...
We also thank Kevin
Boudreau, Russ Coff, Rodolphe Durand, and Muge Ozman for their in¨
sights
...


within or at the end of a fixed period (“maturity”)
...
g
...
If
the economic prospects of the project turn out to
be favorable, a firm may later decide to exercise
the option—that is, to launch the new product, to
purchase the remaining capital of the joint venture, to build a plant for the new technology, or to
operate the acquired license
...

The main contribution of RO is to recognize
that investment projects can evolve over time,
and that this flexibility has value
...
Indeed,
conventional DCF methods often lead to recommendations that conflict with strategic analysis
because they fail to take into account the value of
growth opportunities created by a project
...
g
...
krychowski@it-sudparis
...

Bertrand V
...
fr) is Professor of Strategic Management and Industrial Organization at HEC, Paris
...
Contents may not be copied, e-mailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express written
permission
...


66

Academy of Management Perspectives

Hurry, 1993) and has led to a great deal of literature on the topic
...
g
...
g
...
g
...
However, RO has not lived up to the expectations it
raised at the end of the 1990s
...

In this article, we use an actual decision in the
telecommunications industry to illustrate the concept of real options and the potential benefits of
the RO approach to improve strategic decision
making
...
Finally, we suggest avenues for future
research
...
We then set out the
lessons learned from the case
...

Like its main competitor, “Comptel,”2 Mobitel
had acquired a 3G mobile telecommunications
license at a time when people had high expectations of mobile Internet
...
” For further details, see Triantis, 2005,
p
...

2

These names are used to protect the anonymity of both operators
...


became apparent that 3G mobile telecommunication would not be the bonanza that operators had
hoped for
...
Mobitel’s top management was
torn between the risk of investing massive sunk
costs in a technology that would not be profitable
and the risk of being preempted by its archrival,
Comptel
...
Mobitel’s operations
managers believed that the project would generate
a positive NPV of 106 monetary units (MU) (see
Scenario 1 in Table 1)
...
Moreover,
such a delay would lead to the loss of high-end
customers and therefore result in a significant
reduction in the average revenue per unit
(ARPU)
...

Alternatively, if Mobitel postponed its deployment by one year, Comptel could well do the
same
...

The NPV of the 3G network would then be 107
MU, nearly the same project value as that obtained if Mobitel launched the investment immediately (see Scenario 2b in Table 1)
...

However, this value remains lower than the NPV
of the early-entry scenario
...
The decision took place at a time when
the speed of penetration of the 3G technology was
uncertain because the market was not yet mature
...
In particular, data ARPU
could remain low if consumers used mobile Internet applications only occasionally or used primarily low-bandwidth applications
...
Given the
high uncertainty surrounding the success of the
3G technology and the irreversibility of the investment in a new network, the Mobitel finance
managers were in favor of deferring the rollout
decision
...
Past studies do not provide a
decisive answer to this dilemma
...
From an organizational learning
perspective, it can be argued that firms investing
early in promising technologies increase their absorptive capacity (Cohen & Levinthal, 1990) and
are later much better positioned than competitors
to take advantage of the new technology (e
...
,
3G) once it becomes clearly established on the
market
...

Given this complexity and the high level of

67

uncertainty, decisions on the early adoption of
innovation may lead to mimetic processes, inducing firms to make similar choices (DiMaggio &
Powell, 1983)
...
As such isomorphic behavior
can have a negative impact on profitability (e
...
,
Barreto & Baden-Fuller, 2006), it is of particular
interest to focus on a framework such as real
options, which holds the promise of a more disciplined decision process
...
Similarly, RO is useful both
to evaluate an investment project and to determine the optimal investment timing
...
Indeed, if at
the later date the case for 3G has improved, the
operator will deploy the 3G network
...
In other words, Mobitel held an option to wait
...
The underlying asset S
corresponds to the cash flows generated by the
network
...
The time to maturity T is one year: Beyond this date, the operator would have to
invest in order to address its network’s looming
capacity shortage
...
The option can be
valued with the Black-Scholes formula, which is
the standard model used to evaluate simple options (see Table 2)
...
This value is higher than that of the
early-entry scenario (106 MU), which suggests

68

Academy of Management Perspectives

May

Table 2
Valuation of the Option to Defer With the Black-Scholes Formula
Parameter of a Financial Option
Value

Application to Mobitel’s Investment Project

Value in Monetary Units (MU)

Underlying asset (stock) price (S)
Exercise price (K)
Time to expiration (T)
Risk-free rate interest (r)
Volatility of the underlying asset (␴)

Cash flows generated by the 3G network
Investment cost necessary to deploy a 3G network
Period during which the investment can be postponed
Risk-free interest rate
Volatility of the cash flows generated by the 3G network

50% * 1,078 ϩ 50% * 1,227 ϭ 1,152 MU
1,120 MU
1 year
5% p
...
(based on interest rate of Treasury bills)
20% (estimated with Monte Carlo simulations on S)

Value of the option to defer (C): C ‫ ؍‬S * N(d1) ؊ K e؊rT * N(d2), where
d1 ϭ [ln S/K ϩ (r ϩ ␴2/2) * T]/␴ ͱT

d2 ϭ d1 Ϫ ␴ ͱT
N(
...

Lessons Learned From the Mobitel Case

The Mobitel case highlights three main benefits
of RO analysis (see Table 3)
...
The NPV rule is biased in favor of
early market entry because it takes into account
the risk of waiting (preemption) but not the rewards of waiting (reduced uncertainty)
...
In contrast, RO explicitly incorporates uncertainty and the possibility of modifying
the investment decision based on the value taken
by uncertain variables
...

Eventually, the operator deployed 3G in the most
densely populated areas and EDGE in the rest of
the territory
...

A Helpful Tool for Dialogue Among Decision Makers

Strategic decision making often involves many people and groups pursuing divergent interests (Astley,
Axelsson, Butler, Hickson, & Wilson, 1982)
...
Yet, a successful
strategy emerges from decision processes that take
into account different viewpoints (Eisenhardt,

Table 3
Summary of Benefits of Real Option Analysis in the Mobitel Case
Situation at Mobitel
Valuation
Communication
Decision Process

Potential Benefits of RO

Network rollout delayed, although NPV analysis
recommended immediate launch
Disagreement between the business unit and the
finance department
● Attention focused on the 3G project
● No real interest paid to alternative technical solutions

Informed decision on investment timing (ability to balance
the risks and rewards of delaying market entry)
Improved dialogue between the various project stakeholders
● Greater ability to abandon the project if signs of failure
multiply
● Enhanced reactivity to launch an alternative project in
case of failure

2010

Krychowski and Quelin
´

1999)
...
The approach does
not eliminate any uncertainty regarding the success
of the new technology or the strategy followed by
the main competitor
...

A More Efficient Decision Process

Cognitive biases can prompt management to pursue an investment in spite of negative feedback
(Kahneman, Slovik, & Tversky, 1982)
...
At Mobitel, huge sums had already been invested in the
3G license, and we observed that the analysis
concentrated on the 3G scenario alone, as if there
were no alternative solutions
...
RO prompts top management to seriously consider alternative scenarios from the
outset, and to stop projects when signs of failure
multiply
...
5G
...

Theoretical and Research Implications
he Mobitel example highlights several ways in
which RO can improve the strategic decision
process under uncertainty
...
We organize the
key findings and debates in the RO literature
along two main perspectives: as an interpretative
lens and as a decision framework
...

The contribution of RO to each of these domains
will be examined in turn
...
Firms contemplating entry into a new market can defer investment until the uncertainty is
reduced
...
However, RO takes into consideration that even if the
initial investments are not profitable, they will
provide firms with new capabilities (e
...
, knowledge of a developing country) that will enable
them to seize future opportunities (Kogut & Kulatilaka, 2004; Vassolo, Anand, & Folta, 2004)
...

Another type of investment choice that fits
well with the real options logic is research and
development (R&D) and, more generally, hightechnology investment decisions
...
For example, the analysis of patents by firms active in the pharmaceutical industry
shows that their investments in R&D are consistent with the RO logic (McGrath & Nerkar,
2004)
...
While Japanese high-technology venture
capitalists implicitly follow a real options logic,
whereby initial investments in high-tech research
are followed by a full-scale investment when the
benefits of the new technology appear realizable,
their American counterparts seem to follow an
“all or nothing” strategy (Hurry, Miller, & Bowman, 1992)
...

There is now a vast amount of literature analyzing
governance choices with an options lens, often in
combination with transaction costs economics
(TCE) or the resource-based view
...
As option value increases with the level of uncertainty, a high level
of uncertainty will lead firms to choose JVs as a
mode of market entry rather than wholly owned
subsidiaries, which are much less flexible
...
Indeed,
TCE claims that in order to avoid opportunistic
behavior from the partner, the wholly owned subsidiary is preferable to the JV in case of high
uncertainty (Chi & Seth, 2009)
...

Performance Outcomes of Real Options

RO has also been useful in examining the link
between firms’ performance and the presence of
options within those firms (Tong & Reuer,
2007b)
...

Kester (1984) measured the value of growth
options as the difference between the total market value of a company’s equity and the capitalized value of its current earning stream
...
However, the proportion of the growth
options’ value is much higher for firms operating in high-technology industries than for other

May

firms
...

Breaking down the option value component in
the value of firms and identifying which types of
investments create option value is a challenging
task
...
The study by Tong
et al
...
For example, IJVs in
emerging economies do not create growth option
value, probably because of the high transaction
costs associated with the management of this
option
...
While option theory claims that the
option value increases with the level of uncertainty, there is no simple relationship between the
market value of R&D and the level of uncertainty
...
The bottom line is that we can
observe a U-shaped relationship between market
uncertainty and the market value of R&D, and an
inverted U-shaped relationship between technological uncertainty and the market value of R&D
...
In practice
though, the literature again highlights the complexity of the relationship between the presence
of options and the downside risk supported by
firms
...
Empirical studies show that the relationship between multinationality and downside
risk is curvilinear, whereby risk first declines and

2010

Krychowski and Quelin
´

then increases beyond a certain point of international expansion (Tong & Reuer, 2007a)
...
It highlights two main
possible roles for RO in strategic decision making:
real option valuation and real option reasoning
...
The pioneering valuation models have shown that in a context of
uncertainty RO may produce more appropriate
capital budgeting recommendations than the
NPV rule (e
...
, Brennan & Schwartz, 1985; Majd
& Pindyck, 1987; McDonald & Siegel, 1986)
...
The first real option model in a
duopoly was developed by Dixit and Pindyck
(1994) and opened a growing literature stream
combining real options and game theory (see
Smit and Trigeogis, 2006, for a review of the
literature on this subject)
...
They are mathematically opaque and usually rely on restrictive hypotheses, which may be barely compatible with
real-life investments
...

Real Option Reasoning

In the strategic management field, the literature
concentrates on RO as a way of thinking
...
g
...
Therefore, they
believe that RO should instead be used as a rhetorical tool
...
First, RO can induce firms to undertake risky projects, as option value increases with
volatility (McGrath, 1999)
...
Last, RO prompts management to pilot projects in a proactive way
...
g
...
One benefit
of RO is to encourage management to preserve
flexibility of choice and to modify the investment
project according to economic circumstances
(McGrath, Ferrier, & Mendelow, 2004)
...
These include three main shortcomings: (a) the framework does not apply to all
investment decisions, (b) it raises serious implementation issues, and (c) it does not take into
account behavioral and organizational biases
...

Application Domain
...
Four main conditions have
to be fulfilled in order for a decision to be appropriate for real option logic: irreversibility, uncertainty, flexibility, and information revelation
...
Flexibility means
that when the option expires, the firm really has
the possibility to choose among several alternatives
...
If there is
no other viable alternative, the investment
project is a “bet,” not an option (Copeland &
Keenan, 1998)
...
Whereas the RO ap-

72

Academy of Management Perspectives

proach requires specifying ex ante the possible
project scenarios, exploration activities are difficult to anticipate
...

Finally, the condition of information revelation refers to the possibility of reducing uncertainty during the life of the option, either by
observation or by investing in information acquisition
...
As a result, managers may erroneously drop options that would lead to a
competitive advantage or conversely invest in the
wrong project (Coff & Laverty, 2001)
...
The identification and the valuation of real options both raise difficulties
...
100)
...
Valuing real options is also
a challenging task
...

Managers—and even many academics— do not
have the mathematical skills necessary to use real
option valuation models comfortably and knowledgeably (Lander & Pinches, 1998)
...
For more complex investment decisions, it
is also necessary to adapt standard valuation models to the specificities of the investment project
...


May

Behavioral and Organizational Biases
...
The RO approach consists of starting a lot of projects, but
also of ruthlessly abandoning options that do not
live up to expectations (McGrath, 1999)
...
As the project’s
champions can claim that an apparently failing
project will produce valuable opportunities in the
future, escalation of commitment may occur, entailing the multiplication of losses (Adner &
Levinthal, 2004; Janney & Dess, 2004)
...

Empirical Evidence

Empirical studies on the implementation of RO
are still rare (on this subject see, e
...
, Tong and
Reuer, 2007b), and research remains relatively
silent on how to concretely apply RO theory
...
In capital-intensive industries such as the petroleum industry,
which are comfortable with sophisticated capital
budgeting decision tools, real options are evaluated with complex models, often in combination
with decision analysis approaches (e
...
, Chorn &
Shokor, 2006; Smith & McCardle, 1999), in order
to make decisions on exploration investment
projects
...
In other instances, real options are
used to evaluate an investment under uncertainty,
such as the investment in a software platform
(Taudes, Feurstein, & Mild, 2000), in environ-

2010

Krychowski and Quelin
´

mental mining equipment (Cortazar, Schwartz, &
Salinas, 1998), or in an R&D project (Pennings &
Lint, 1997)
...
Indeed, they do not reflect the
practice of firms, but are rather the result of pilot
projects on the use of RO
...

Future Research
n spite of its surge in publications, RO theory
remains a relatively young field of research, of
which only a small portion speaks directly to
managers
...


I

Exploiting the Descriptive Power of Real Options:
The “Telescope Dilemma”

The main contribution of RO theory in the interpretative lens perspective is to shed new light on
the consequences of uncertainty, which is one of
the five key concepts structuring research in strategic management (Rumelt, Schendel, & Teece,
1994)
...
As a consequence, RO theory shows that
firms can take advantage of uncertainty rather
than trying to avoid it
...

In addition, RO theory contributes to a better
understanding of the impact of firms’ decisions on
their performance
...
To illustrate, Tong et al
...
1024) explained that existing studies
came up with contradictory results on the performance impact of diversifying versus nondiversifying JVs
...

Overall, the literature on real options has significantly contributed to a better understanding of
the behavior and performance of firms
...

Scholars studying RO face the same dilemma as
astronomers, who have to make a choice between
using small telescopes that can see a large portion
of the universe but cannot detect weak signals and
large telescopes that are much more powerful but
have a narrow focus
...

Future research should attempt to analyze more
focused issues
...
Second, conducting studies
in specific settings would enable scholars to model
the impact of the main variables that affect option
value instead of testing the effect of broad variables that provide only indirect evidence of the
options perspective
...
The uncertainty parameter ␴,
which is central to the options theory, should be
studied in great detail, because the various sources
of uncertainty have a different impact— or no
impact at all— on an option’s value
...
Similarly, it would be interesting to study
to what extent the difference between the underlying asset value (S) and the exercise price (K)
affects an investment decision based on real options logic
...

Another variable that is often overlooked in
the real options literature is the dividend rate
(␦)3
...
In the corporate
world, the dividend rate corresponds to the cost of
keeping the option alive
...

Developing the Normative Aspirations of Real
Options Theory

Another critical contribution that has been highlighted in the existing literature is the normative
benefits of RO
...

Future research will have to better understand if
and to what extent aligning corporate decision
processes with real option logic may affect competitive advantage
...

Application Domain of RO Analysis

Corporate applications and academic research
have concentrated on specific decisions in a limited number of industries
...
Research
now needs to study in greater detail for which
types of decisions RO analysis is beneficial
...


May

doing, it is important to keep in mind that there is
no clear distinction between projects that fit well
with the RO logic and those that do not
...

The “telescope” metaphor is also applicable
to the normative perspective of RO: At one end of
the spectrum, RO can be applied in a formal and
quantitative way in order to make decisions on
focused investment projects for which the main
sources of uncertainty can be modeled
...
As a matter of fact, Triantis
(2005) reported that some firms use RO as a way
of thinking, whereas others apply formal, quantitative RO valuation models
...
The RO method employed in one setting
may be inappropriate in another
...
There is some potential for simplifying the computational side of real options, in
particular by using more intuitive simulationbased methods
...
Like game theory, RO theory
is grounded on a hyper-rational vision of the decision process, and on the capacity of agents to
model uncertainty and its consequences
...

Future research will have to incorporate a per-

2010

Krychowski and Quelin
´

spective of how managers make decisions in light
of their options (Barnett, 2008)
...
These include organizational structure, incentives for management, and allocation of decision rights
...
In particular,
conducting detailed, longitudinal case studies, as
is common in the strategic investment decision
literature (e
...
, Bower, 1970), would greatly advance RO research
...
Conducting in-depth case studies would enable researchers
to understand how RO can improve the strategic
decision process from project inception to termination, and to test whether, and under what conditions, managers are capable of sticking to the
optional discipline
...

Building Bridges Between the Various RO
Research Streams

The RO literature is marked by the lack of connections among the various subfields, and establishing bridges between them would advance RO
theory
...

Reconciling the Descriptive and Normative Perspectives

Research generally involves a balance between a
descriptive and a normative perspective, and RO
theory is no exception
...
The interpretative lens and decision framework streams have
evolved independently, whereas they ought to en-

75

rich each other: Research on how firms actually
make decisions should be used to validate and
refine hypotheses of RO valuation models, as is
suggested by Cuypers and Martin (2010) for governance choices
...

It will be a challenge to reconcile the descriptive and normative perspectives, as they rest on
seemingly contradictory hypotheses: The interpretative lens stream makes the implicit assumption
that firms intuitively use RO
...
Nevertheless, the Mobitel example
suggests that a formalized RO analysis can be
beneficial, even if the RO logic is intuitively used
by the management: On one hand, Mobitel management intuitively pursued an RO logic, as they
decided to wait in spite of a positive NPV
...

Reconciling the Qualitative and Quantitative Approaches

Within the decision framework stream, there is
again an apparent contradiction between the “real
option valuation” and the “real option reasoning”
approaches
...
Indeed, empirical research has
demonstrated that, in practice, the quantitative
evaluation of a project plays only a limited role in
strategic investment decisions, and that management gives an equal, if not greater, importance to
strategic considerations emerging from informal
processes (e
...
, Arnold & Hatzopoulos, 2000; Butler, Davies, Pike, & Sharp, 1991)
...
A purely
rhetorical use of RO presents two additional disadvantages
...
Second, flexibility usually comes at a cost
...

The field experience at Mobitel suggests that
we should go beyond the “quantitative versus
qualitative” debate
...
The option value per se is only one of
several elements affecting the decision
...
Conversely, an RO
that would be based only on qualitative analysis,
without attempting to value the real option(s)
embedded in the investment decision, would be
limited to superficial conclusions
...
g
...

Conclusion
verall, this article has shown not only the
practical use of RO theory but also the current gaping holes in its use
...

There is also a clear need for more empirical
research that directly demonstrates the relevance
of the RO perspective to explain firms’ behavior
and identifies clearly the benefits of RO to the
resource allocation process
...


O

References
Adner, R
...
A
...
What is not a real
option: Considering boundaries for the application of

May

real options to business strategy
...

Arnold, G
...
, & Hatzopoulos, P
...
(2000)
...
Journal of Business Finance & Accounting, 27(5/6), 603
...
G
...
, Butler, R
...
, Hickson, D
...
, &
Wilson, D
...
(1982)
...
Journal of
Management Studies, 19(4), 357–375
...
L
...
An attention-based view of real
options reasoning
...

Barreto, I
...
(2006)
...
Journal of Management Studies, 43(7), 1559 –1581
...
, & Kauffman, R
...
A case for using real
options pricing analysis to evaluate information technology project investments
...

Borison, A
...
Real options analysis: Where are the
emperor’s clothes? Journal of Applied Corporate Finance,
17(2), 17–31
...
L
...
Managing the resource allocation process
...

Bowman, E
...
, & Hurry, D
...
Strategy through the
option lens: An integrated view of resource investments
and the incremental-choice process
...

Bowman, E
...
, & Moskowitz, G
...
(2001)
...
Organization Science, 12(6), 772–777
...
J
...
S
...
Evaluating natural resource investments
...

Busby, J
...
, & Pitts, C
...
C
...
Real options in
practice: An exploratory survey of how finance officers
deal with flexibility in capital appraisal
...

Butler, R
...
, Pike, R
...
(1991)
...
Journal of Management Studies, 28(4), 395–
415
...
, & Seth, A
...
A dynamic model of the choice
of mode for exploiting complementary capabilities
...

Chorn, L
...
, & Shokhor, S
...
Real options for risk
management in petroleum development investments
...

Coff, R
...
, & Laverty, K
...
(2001)
...

Cohen, W
...
, & Levinthal, D
...
(1990)
...

Administrative Science Quarterly, 35(1), 128 –152
...
E
...
(1998)
...

Cortazar, G
...
S
...
(1998)
...
Management Science, 44(8), 1059 –1070
...
, & Martin, X
...
What makes and what
does not make a real option? A study of equity shares in
international joint ventures
...

DiMaggio, P
...
, & Powell, W
...
(1983)
...
American Sociological Review, 48(2), 147–160
...
, & Pindyck, R
...
(1994)
...
Princeton, NJ: Princeton University Press
...
M
...
Strategy as strategic decision
making
...

Folta, T
...
, & O’Brien, J
...
(2004)
...
Strategic Management Journal, 25(2),
121–138
...
(1991)
...
New York: Free Press
...
, & Harvey, C
...
The theory and practice
of corporate finance: Evidence from the field
...

Harchaoui, T
...
, & Lasserre, P
...
Testing the option
value theory of irreversible investment
...

Howell, S
...
(1997)
...
Journal of
Business Finance & Accounting, 24(7, 8), 915–935
...
, Miller, A
...
, & Bowman, E
...
(1992)
...
Strategic Management
Journal, 13(2), 85–101
...
J
...
G
...
Can real-options analysis
improve decision-making? Promises and pitfalls
...

Kahneman, D
...
, & Tversky, A
...
Judgment
under uncertainty: Heuristics and biases
...

Kemna, A
...
Z
...
Case studies on real options
...

Kester, W
...
Today’s options for tomorrow’s growth
...

Kogut, B
...
Joint ventures and the option to expand
and acquire
...

Kogut, B
...
(2004)
...
Academy of Management Review, 29(1),
102–110
...
M
...
E
...
Challenges to the
practical implementation of modeling and valuing real
options
...

Leiblein, M
...
(2007)
...
In J
...
Reuer &
T
...
Tong (Eds
...
24, pp
...
Greenwich: Emerald Group Publishing Ltd
...
, & Michaels, M
...
The real power of real
options
...

Lieberman, M
...
, & Montgomery, D
...
(1998)
...
Strategic Management Journal,
19(12), 1111–1125
...
, & Pindyck, R
...
(1987)
...
Journal of Financial Economics, 18(1), 7–27
...
L
...
R
...
The value of
waiting to invest
...

McGrath, R
...
(1999)
...
Academy of Management Review, 24(1), 13–30
...
G
...
J
...
L
...

Real options as engines of choice and heterogeneity
...

McGrath, R
...
, & Nerkar, A
...
Real options reasoning and a new look at the R&D investment strategies of
pharmaceutical firms
...

Miller, K
...
, & Shapira, Z
...
An empirical test of
heuristics and biases affecting real option valuation
...

Miller, K
...
, & Waller, H
...
(2003)
...
Long Range
Planning, 36(1), 93
...
T
...
S
...
Decision making under
uncertainty: Real options to the rescue? Engineering
Economist, 47(2), 105–151
...
, & Tufano, P
...
When are real options
exercised? An empirical study of mine closings
...

Myers, S
...
(1977)
...

Journal of Financial Economics, 5(2), 147–175
...
C
...
Finance theory and financial strategy
...

Myers, S
...
(1996)
...
Financial Management, 25(4), 95–103
...
, & Sobrero, M
...
Uncertainty and the
market valuation of R&D within a real options logic
...

Pennings, E
...
(1997)
...
European Journal of Operational Research,
103(1), 83–94
...
, & Lint, O
...
Market entry, phased
rollout or abandonment? A real option approach
...

Quigg, L
...
Empirical testing of real option-pricing
models
...

Reuer, J
...
, & Tong, T
...
(2007)
...
Advances in Strategic Management, 24,
145–173
...
, & Gillies, C
...
Making the most of management tools and techniques: A survey from Bain &
Company
...

Rocha, K
...
, & Garcia, F
...
A
...
Real estate
and real options: A case study
...

Rumelt, R
...
, Schendel, D
...
, & Teece, D
...
(Eds
...
Fundamental issues in strategy: A research agenda
...

Ryan, P
...
, & Ryan, G
...
(2002)
...

Sharp, D
...
(1991)
...
Sloan Management Review, 32(4), 69 –
74
...
T
...
, & Trigeorgis, L
...
Real options and
games: Competition, alliances and other applications of
valuation and strategy
...

Smith, J
...
, & McCardle, K
...
(1999)
...
Operations Research, 47(1), 1–15
...
, Feurstein, M
...
(2000)
...
MIS
Quarterly, 24(2), 227–243
...
W
...
J
...
Real options in multinational corporations: Organizational challenges and
risk implications
...


May

Tong, T
...
, & Reuer, J
...
(2007b)
...
In J
...
Reuer & T
...
Tong
(Eds
...
24,
pp
...
Greenwich: Emerald Group Publishing
Ltd
...
W
...
J
...
W
...
International joint ventures and the value of growth options
...

Triantis, A
...
(2005)
...

Tufano, P
...
How financial engineering can advance
corporate strategy
...

Vassolo, R
...
, Anand, J
...
B
...
Nonadditivity in portfolios of exploration activities: A real
options-based analysis of equity alliances in biotechnology
...

Woiceshyn, J
...
(2008)
...
Academy of Management Perspectives, 22(2), 85–
99

---