Application of the Real Options Method for Innovation Project Investment Evaluation

DOI

10.2991/jahp-19.2019.73How to use a DOI?

Keywords

innovation project; project investment; real options method; binomial model; project efficiency evaluation

Abstract

Innovations are regarded as one of the important sectors of the economy and investment in economically developed countries. The underdevelopment of organizational-economic forms and the insufficient development of mechanisms for supporting and implementing projects in innovations impede the development in this sphere. The article analyzes the different methods for calculating the value of options. The stages of decision-making support in the implementation of innovation projects that are based on real options method were analyzed. According to the results of the analysis, conclusion was made that when evaluating real innovative investments, Cox-Rubinstein’s approach is more acceptable. The binominal model allows obtaining more accurate results and presents a decision tree with variants of branching, which allows visualizing the scenarios and probabilities of these solutions.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Elena Makarova
AU  - Аnna Firsova
PY  - 2019/09
DA  - 2019/09
TI  - Application of the Real Options Method for Innovation Project Investment Evaluation
BT  - Proceedings of the 4th International Conference on Economy, Judicature, Administration and Humanitarian Projects (JAHP 2019)
PB  - Atlantis Press
SP  - 344
EP  - 348
SN  - 2352-5428
UR  - https://doi.org/10.2991/jahp-19.2019.73
DO  - 10.2991/jahp-19.2019.73
ID  - Makarova2019/09
ER  -