This chapter is organized as follows. The economic problem on which this book focuses is motivated in Section 1. The two tools used to study this economic problem, which are real options theory and game theory, are discussed in Sections 2 and 3, respectively. Section 4 surveys the contents of this book. In Section 5 some promising extensions of the research presented in this book are listed. 1. TECHNOLOGY INVESTMENT Investment expenditures of companies govern economic growth. Es pecially investments in new and more efficient technologies are an impor tant determinant. In particular, in the last two decades an increasing part of the investment expenditures concerns investments in informa tion and communication technology. Kriebel, 1989 notes that (already) in 1989 roughly 50 percent of new corporate capital expenditures by major United States companies was in information and communication technology. Due to the rapid progress in these technologies, the tech nology investment decision of the individual firm has become a very complex matter. As an example of the very high pace of technological improvement consider the market for personal computers. IBM intro duced its Pentium personal computers in the early 1990s at the same price at which it introduced its 80286 personal computers in the 1980s. Therefore it took less than a decade to improve on the order of twenty times in terms of both speed and memory capacities, without increasing the cost (Yorukoglu, 1998).
Erscheinungsdatum: 07.12.2010

lgrsnf/A:\Springer\bok%3A978-1-4757-3423-2.pdf

nexusstc/Technology Investment: A Game Theoretic Real Options Approach/cf12402874156a3cc1676d73d3bb6db1.pdf

zlib/Mathematics/Kuno J. M. Huisman (auth.)/Technology Investment: A Game Theoretic Real Options Approach_2250450.pdf

Huisman, Kuno J. M.

Springer-verlag New York, Llc

Springer London, Limited

Springer Nature

Kluwer

Theory and Decision Library, Series C: Game Theory, Mathematical Programming and Operations Research, Boston, MA, 2001

Theory and decision library C, New York, 2011

United States, United States of America

Springer Nature, New York, NY, 2013

Dec 07, 2010

Boston, 2010

1, 20130309

lg1081486

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Source title: Technology Investment: A Game Theoretic Real Options Approach (Theory and Decision Library C (28))

<p>The technology investment decision of an individual firm has become a very complex matter in recent years. One reason is the incredibly rapid progress of technological developments in the last decades. Another reason is the existence of and movement towards oligopolistic markets. In this book, several theoretical and technology investment models of the firm are developed and analyzed. To solve these models real options theory and game theory is used. The real options theory makes it possible to explicitly take into account (and value) the option value of waiting. Game theory is used to incorporate strategic interactions. Technology Investment extends the already existing real options models by the introduction of game theory. The game theory, or more specifically, the theory of timing games, is extended by the inclusion of shastics.</p>

The technology investment decision of an individual firm has become a very complex matter in recent years. One reason is the incredibly rapid progress of technological developments in the last decades. Another reason is the existence of and movement towards oligopolistic markets. In this book, several theoretical and technology investment models of the firm are developed and analyzed. To solve these models real options theory and game theory is used. The real options theory makes it possible to explicitly take into account (and value) the option value of waiting. Game theory is used to incorporate strategic interactions. Technology Investment extends the already existing real options models by the introduction of game theory. The game theory, or more specifically, the theory of timing games, is extended by the inclusion of stochastics

Front Matter....Pages i-ix
Introduction....Pages 1-10
Front Matter....Pages 11-11
Constant Investment Cost....Pages 13-49
Decreasing Investment Cost....Pages 51-67
Front Matter....Pages 69-69
One New Technology....Pages 71-105
Two New Technologies....Pages 107-126
Multiple New Technologies....Pages 127-157
Front Matter....Pages 159-159
One New Technology and Symmetric Firms....Pages 161-195
One New Technology and Asymmetric Firms....Pages 197-215
Two New Technologies....Pages 217-252
Back Matter....Pages 253-262

2013-12-12