Artikel
Modeling sequential R&D investments: A binomial compound option approach
In this paper, we propose a binomial approach to modeling sequential R&D investments. More specifically, we present a compound real options approach, simplifying the existing valuation methodology. Based upon the same set of assumptions as prior models, we show that the number of computational steps for valuing any compound option can be reduced to a single step. We demonstrate the applicability of our approach using the real-world example of valuing a new drug application. Overall, our work provides a heuristic framework for fostering the adoption of binomial compound option valuation techniques in R&D management.
- Language
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Englisch
- Bibliographic citation
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Journal: Business Research ; ISSN: 2198-2627 ; Volume: 8 ; Year: 2015 ; Issue: 1 ; Pages: 39-59 ; Heidelberg: Springer
- Classification
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Management
Management of Technological Innovation and R&D
Portfolio Choice; Investment Decisions
- Subject
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Research and development
Real options
Compound options
Resource allocation
Binomial model
- Event
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Geistige Schöpfung
- (who)
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Hauschild, Bastian
Reimsbach, Daniel
- Event
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Veröffentlichung
- (who)
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Springer
- (where)
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Heidelberg
- (when)
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2015
- DOI
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doi:10.1007/s40685-014-0017-5
- Handle
- Last update
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10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Hauschild, Bastian
- Reimsbach, Daniel
- Springer
Time of origin
- 2015
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