Research On The Timing Of Entering Hi-tech Industry Bases Based On Option Game Theory

Hi-tech industry is the mainstay of economy development, but investing in this industry not only needs longer investment cycle, but also needs a large amount of money to support.Besides, because of the uncertainty of product and market, investment risk is extremely high. So, choosing the correct entering time is important for success. Based on option game theory, we research the timing of entering hi-tech industry base. Especially,except considering uncertainty and irreversible cost, we also put congestion effect, synergy effect and the sequence of synergy effect into analysis framework according to different market structure.According to the research on the entry timing both at home and abroad, we find that the research on the timing of entering hi-tech industry base is few,while the research on the timing of entering hi-tech industry base based on option game theory is fewer.And this is why we make a research on the problem of the timing of entering hi-tech industry base. Due to the diversity of investment decision-making methods, we introduce why we use option game theory to solve the issue of the timing of entering hi-tech industry base in detail. Meanwhile,we put forward the main factors that affect the timing of entering hi-tech industry base,which mainly include congestion effect, synergy effect, uncertainty and irreversible cost. On the basis of the above theory, we divide the market into three types of market structures:a single entrant, the entrants in the same supply chain level, and the up_down stream entrants.we also analyze the game equilibrium results,the value functions in various market structures,and how the factors influence the entry timing. In order to explain the interaction between entrants more intuitively, we analyze the interaction results using MATLAB simulation.In this paper,we get the following conclusions. Firstly,based on the analysis of a single entrant's entry timing,we find that high uncertainty and cost delay entry timing.Secondly,when analyzing entry timing of the entrants in the same supply chain level,we regard congestion effect as main factor while considering the uncertainty and irreversible cost,and eventually entrants forms three different kinds of equilibriums:preemptive entering equilibrium, sequential entering equilibrium and simutaneous entering equilibrium.In the preemptive entering equilibrium,the congestion effect accelerates the leader's entry timing while delaying the follower's entry timing.In the sequential entering equilibrium, the congestion effect doesn't have any impact on the leader's entry timing but delays the follower's entry timing.In the simutaneous entering equilibrium, congestion effect delays the entrants'entry timing.Thirdly,we analyze the up_down stream entrants only affected by synergy effect except uncertainty and irreversible cost, and we also put the sequence of synergy effect into account.Finally,two equilibriums come into being:sequential entering equilibrium and simutaneous entering equilibrium. In the sequential entering equilibrium, the synergy effect delays the upstream entrants'entry timing and accelerates the up_down stream entrants'entry timing.In the simutaneous entering equilibrium,synergy effect delays entrants'entry timing.Fourthly,besides uncertainty and irreversible cost, we analyze the up_down stream entrants affected by both synergy effect and congestion effect. Although,we consider the sequence of the synergy effect, entrants choose the entry timing according to the interaction force between synergy effect and congestion effect.There exists there equilibriums:preemptive entering equilibrium, sequential entering equilibrium and simutaneous entering equilibrium. When the congestion effect is in the dominant position,both entrants have motion to enter the base firstly,thus resulting in preemptive entering equilibrium; when the synergy effect is in the dominant position, and the congestion effect is in the secondary position,considering sequence of the synergy effect,the upstream entrant will enter the base firstly and the up_down stream entrant will enter the base as follower,and then leading to sequential entering equilibrium;when the interaction of the synergy effect and the congestion effect can be offset,neither entrant will have motion to enter firstly,then causing simutaneous entering equilibrium.