Option Game Theory Applications In The Enterprise Investment

Investment is the principal matter of living and development. There is a essential flaw in traditional tool of Net Present Value(NPV), which comes from the confusion between risk and uncertainty because uncertainty brings about not only losing but also earnings. So it is important for investor to make full use of uncertainty in order to get income and avoid loss. In this paper firstly I clearly distinguish risk from uncertainty on the basis of defect of NPV and analyze all kinds of uncertainty on investment of real capital for enterprise. Furtherly I bring out a effective means to manage uncertainty, namely real option. In this section I detailedly tell source and kind of real option, relation to financial option , difference to NPV and the principle of application of Real Option in practical. Although the means of Real Option initiate a bourn of investment decision-making, it also has a weakness which manifest on the fact of neglecting the strategy of rival completely. Game theory is a powerful weapon to decision-making of multi-person. It is a spontaneous integration which utilizes real option on decision-making under frame of game theory. This is a completely new thinking to make decision on investment. In this paper I make a superficial research on the integration.