Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Computer Sciences
Technology Competition And Optimal Investment Timing: A Real Options Perspective, Robert J. Kauffman, X. Li
Technology Competition And Optimal Investment Timing: A Real Options Perspective, Robert J. Kauffman, X. Li
Research Collection School Of Computing and Information Systems
Companies often choose to defer irreversible investments to maintain valuable managerial flexibility in an uncertain world. For some technology-intensive projects, technology uncertainty plays a dominant role in affecting investment timing. This article analyzes the investment timing strategy for a firm that is deciding about whether to adopt one or the other of two incompatible and competing technologies.We develop a continuous-time stochastic model that aids in the determination of optimal timing for managerial adoption within the framework of real options theory. The model captures the elements of the decision-making process in such a way so as to provide managerial guidance in …
Using Real Options Analysis For Evaluating Uncertain Investments In Information Technology: Insights From The Icis 2001 Debate, Paul P. Tallon, Robert J. Kauffman, Henry C. Lucas, Andrew B. Whinston, Kevin Zhu
Using Real Options Analysis For Evaluating Uncertain Investments In Information Technology: Insights From The Icis 2001 Debate, Paul P. Tallon, Robert J. Kauffman, Henry C. Lucas, Andrew B. Whinston, Kevin Zhu
Research Collection School Of Computing and Information Systems
Business and information systems (IS) executives continue to grapple with issues of risk and uncertainty in evaluating investments in information technology (IT). Despite the use of net present value (NPV) and other investment appraisal techniques, executives are often forced to rely on instinct when finalizing IT investment decisions. Recognizing the shortcomings of NPV, real options analysis has been suggested as an alternative approach, one that considers the risks associated with an investment while recognizing the ability of corporations to defer an investment until a later period or to make a partial investment instead. Responding to a growing interest in real …