Title :
Application of real options in project portfolio selection
Author :
Wang, Chengchao ; Shou, Yongyi
Author_Institution :
Sch. of Manage., Zhejiang Univ., Hangzhou, China
Abstract :
The real options theory has received widespread attention for its response to environmental uncertainty and managerial flexibility. The paper attempts to apply real options theory in project portfolio selection so as to maximize the option value of the selected project portfolio. On the basis of analyzing major types of real options and their evaluation, it is found that real options are suitable for project selection, and the compound options are more in line with real-world project portfolios.
Keywords :
combinatorial mathematics; investment; optimisation; stock markets; compound options; project portfolio selection; real options theory; Compounds; Industries; Investments; Portfolios; Pricing; Production; Switches; Real options; project portfolio; selection;
Conference_Titel :
Industrial Engineering and Engineering Management (IEEM), 2011 IEEE International Conference on
Conference_Location :
Singapore
Print_ISBN :
978-1-4577-0740-7
Electronic_ISBN :
2157-3611
DOI :
10.1109/IEEM.2011.6118036