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Model Description

  • Christian ArtmannEmail author
Chapter
  • 858 Downloads
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 620)

Abstract

This chapter defines the information updating valuation model. Since our model builds upon an extended version of the before mentioned model for valuing managerial flexibility in R&D projects developed by Huchzermeier and Loch (2001), we will start with a brief description of it. In Section 3.2, we gradually derive the Bayesian updating formulation for an update of the mean and the variance of the market requirement distribution. This information updating framework is then integrated into a valuation model that allows to determine the value of an information update given managerial flexibility (Section 3.3).

Keywords

Posterior Distribution Prior Distribution Product Performance Performance Requirement Real Option 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  1. 1.ImmenstadtGermany

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