Investment Project Evaluation Option Game Model And Its Application For Analysis

The traditional method of quantitative evaluation on the existing investment projects provides a quantitative basis for investment decisions. However, because some of the assumptions ignore a lot of real and important factors, there are many problems in practical applications. The value of investing projects on real options was evaluated based on the theory of Option Pricing and game approach. This method not only considers the influence of competition among investors on the value of real options, but also greatly increases the flexibility and accuracy of the traditional investment method. Therefore the insufficiency of traditional investment methods was made up. All of these led the project value to be more practical.Option Game Theory is a theoretical method to evaluate project value which includes real option. At the mean time, it is also a way to make scientific management decisions using Game Theory and model. The process of valuating projects includes setting up an investment policy assumptions and variables, the mathematical description of investment uncertainty, Real Options Valuation, market analysis , game analysis and model selection and scientific decision-making.Firstly, this paper introduces the concept of time power, based on the domestic and international scholar researches and the basic Game Theory was explained. Secondly it also summarized the fixed price theory in kind, the general analysis frame, the theory's development history and current situation. Thirdly, through using symmetric and asymmetric duopoly game model options, two cases in the strategic investment decision-making under uncertainty were studied in the paper. In the next part, Asymmetric duopoly model was expensed and was utilized to analyze the real estate investment and the production investment appraisal under the condition of competition. Finally, combining the Real Option Pricing Theory, this paper got optimal investment results with symmetric and asymmetric information, through exploring asymmetric information to options for optimal investment Game.