Asian real option method to estimate project’s economic value

lack of real option method application conforming to expectations in the topic of decision making is a reality. Current studies have repeatedly considered the effect of volatility overestimation and unreliability of decision maker in the result of real option method due to the differences between financial market and real world circumstances. These criticisms reduce the confidence in real option valuation method. In this paper, the consolidation of Real option and Asian option has been considered to approach the conditions of the real world. This approach would decrease the criticisms, arisen against real option method based on inherent similarities between Asian option and real world circumstances. In the present research work, the effect of Asian Real Option (A¬¬¬¬RO) approach has been investigated on real assets that conform to the Geometric Brownian Motion or Mean Reverting Process

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