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On Technology Innovation Investment Decision Of Enterprise Based On Option-Game Theory

Posted on:2004-01-29Degree:DoctorType:Dissertation
Country:ChinaCandidate:Z P TangFull Text:PDF
GTID:1116360092497579Subject:Management Science and Engineering
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Technology innovation is an important means to enhance competitive power and sustainable development of enterprises, and also is the impetus of national economic growth. Thus, it is very important that whether the technology innovation investment is successful or not Traditional investment decision methods can not properly deal with the uncertainty, irreversibility and competition of technology innovation investment, and thus lead to error decisions. The option-game theory and methodology can bring the uncertainty, irreversibility and competition to one analytical framework to evaluate project and make decision, which overcomes the limitations and shortcomings. So, it is a more scientific modem investment decision-making method. Thus, it is more proper to evaluate the technology innovation investment projects and get corresponding investment decisions using option-game theory and methodology.In this dissertation, the author firstly summarizes traditional project investment decision methods, and points out their limitations and shortcomings, and then systematically introduces the newest development of modem investment decision-making theory and methodology: option-game theory. Secondly, this dissertation defines the concepts of technology innovation investment of enterprise and its decision and its phrases, and analyzes the influencing facts and option-game characteristics of enterprise's technology innovation investment decision-making. The author thinks that the technology innovation investment of enterprise is a serial investment of multi-phase, and its decision-making is a capital budgeting issue of serial investment The influencing facts of enterprise's innovation investment decision-making include irreversibility of costs, uncertainty faced by projects and competition because of the shared investment options between enterprises. The enterprise should analyze the projects investment in a decision framework which includes above three facts in order to obtain the optimal investment decisions. The technology innovation investment of enterprise has option-game characteristics, because that real option method can properly deal with uncertainty and irreversibility, and game theory can properly deal withinvestment competition between enterprises. Thus, we can applies option-game theory to make the decision of technology innovation investment In this section, we review the traditional evaluation and decision-making methods of technology innovation investment, and point out their limitation. Thirdly, based on option-game theory, we analyze the strategies and behaviors of technology innovation investment of enterprise under the conditions of monopoly and competition by establishing corresponding option-game models. The conclusions are: under the case of monopoly, the enterprise has the ability to delay the investment, thus it can take the advantages of option value brought by uncertainty to select the optimal timing of investment in each phrase flexibly; under the case of competition, enterprise will select the optimal investment timing by comparing the tradeoff between the benefits of option value and the strategic lost of competitor's preemption, because preemption of competitor will reduce the ability of enterprise to delay investment Comparing with the case of monopoly, the enterprise usually invests early, hi the meantime, by comparing the outcomes of investment cooperation in the R&D phrase with that of competition, we can conclude that R&D investment cooperation is Pareto dominant strategy, since enterprise can fully take advantage of the option value brought by uncertainty, and thus enhance the flexibility of decision-making. Lastly, based on above theoretical analysis, we systematically set forth the generic application framework of technology innovation investment decision-making based on option-game theory, and then give some case analysis.This dissertation provides a brand-new theory and application framework for technology innovation investment decision-making of enterprise, which has theoreti...
Keywords/Search Tags:Real Option, Option-game, Investment, Decision-making, Technology Innovation
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