Real Options in Capital Investment: Models, Strategies, and Applications


This compilation integrates various new contributions to the growing "real options" literature. Recent developments in the valuation of capital investment opportunities seen as real options (e.g. to defer, expand, abandon, or switch) have provided the tools and unlocked the possibilities to revolutionize the field of capital budgeting. The resulting insights, strategies, and techniques enable quantifying the thus far elusive elements of managerial operating flexibility and strategic interactions. These are vital to successfully capitalize on favorable future investment opportunities or limit losses from adverse market developments. This book presents various models and operating strategies, and a variety of applications ranging from acquisitions and divestitures, to natural resource development and pollution compliance. It is intended for both the academic and the professional market.

Additional information

Includes content by:
  • Elizabeth Olmsted Teisberg
  • Eero Kasanen
  • Lenos Trigeorgis
  • Van Son Lai
  • Nalin Kulatilaka
Publisher: Place of publication:
  • Westport, CT
Publication year:
  • 1995


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