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Technology Investment: A Game Theoretic Real Options Approach

  • Kuno J. M. Huisman

Part of the Theory and Decision Library book series (TDLC, volume 28)

Table of contents

  1. Front Matter
    Pages i-ix
  2. Introduction

    1. Kuno J. M. Huisman
      Pages 1-10
  3. Decision Theoretic Models

    1. Front Matter
      Pages 11-11
    2. Kuno J. M. Huisman
      Pages 13-49
    3. Kuno J. M. Huisman
      Pages 51-67
  4. Game Theoretic Adoption Models

    1. Front Matter
      Pages 69-69
    2. Kuno J. M. Huisman
      Pages 71-105
    3. Kuno J. M. Huisman
      Pages 107-126
    4. Kuno J. M. Huisman
      Pages 127-157
  5. Game Theoretic Real Option Models

    1. Front Matter
      Pages 159-159
    2. Kuno J. M. Huisman
      Pages 161-195
    3. Kuno J. M. Huisman
      Pages 197-215
    4. Kuno J. M. Huisman
      Pages 217-252
  6. Back Matter
    Pages 253-262

About this book

Introduction

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).

Keywords

development game theory investment options stochastics

Authors and affiliations

  • Kuno J. M. Huisman
    • 1
  1. 1.Centre for Quantitative Methods CQM B.V.EindhovenThe Netherlands

Bibliographic information

  • DOI https://doi.org/10.1007/978-1-4757-3423-2
  • Copyright Information Springer-Verlag US 2001
  • Publisher Name Springer, Boston, MA
  • eBook Packages Springer Book Archive
  • Print ISBN 978-1-4419-4911-0
  • Online ISBN 978-1-4757-3423-2
  • Series Print ISSN 0924-6126
  • Series Online ISSN 2194-3044
  • Buy this book on publisher's site