An option pricing approach to investment in innovations in a competitive environment

Arbeitspapier

In this paper it is illustrated how option-based valuation can be used to determine whether and when a firm should patent and adopt an Innovation if the arrival time of competitors is stochastic. Four distinct strategies are derived: Apply for a patent without introducing the new technology right away, patent the Innovation and invest immediately, initiate the new project without patent protection, or defer the decision. It is shown how competition and the level of patent fee determines the strategy to be pursued and the maximum amount of R&D expenditures.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tübinger Diskussionsbeiträge ; No. 116

Classification and Topics

• Classification: Wirtschaft
• Subject: Innovationsmanagement ; Investitionsentscheidung ; Optionspreistheorie ; Innovationswettbewerb ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Reiß, Ariane
• Event: Veröffentlichung
• (who): Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät
• (where): Tübingen
• (when): 1997

Further information

• Handle: http://hdl.handle.net/10419/104835
• Last update: 10.03.2025, 11:44 AM CET