The Analysis Of Pricing Model Of Investment Opportunity Under Competition

Competition is one of important characteristics of modern company's operation activity and it's an all-round competition, referring to many fields, such as management, channels,-products, services and ideas, etc. The competition of research and development of new technology (R&D) has a high place, because the activity of R&D can produce new economy growth points, and the results of R&D are protected by law, which can change the competition rule of market, screening competitors out of market, taking the advantage of new technology completely . Therefore, it's very important for investors to grasp investment opportunity under competition.The main task of this article is to study the optimal investment problem of each company when there're two companies competing for a research and development project. To solve this problem, we can begin with the case of no competition, that's to say only one company has the chance to invest in this project. Therefore, we firstly set on the optimal investment problem of only one company. With real options theory, we analyze the investment time problem of R&D project on the condition that the return is uncertain. Furthermore, we find out the turning points of optimal investment. Then, we choose the first time the patent p touches or over the optimal investment boundary as its optimal investing time. Base on these theories, we add competing factors into the problem, such as tactic and competition between companies, study the pricing model of R&D project under competition, and try to get the value of investment opportunity and company's optimal investment boundary. At last, we analyze company's investment problem under the assumption that once it enters the project ,it will succeed during several years.