Research On The Model Of Option Game For The Time Of Real Estate Investment

As a pillar industry of national economy, the real estate industry in recent years has maintained a high speed of development, in promoting national economic development plays an important role. But at the same time, the real estate industry there are also higher risk, investment opportunities in the selection and formulation of investment strategy, be very careful, once the investment fails, will the developer not only caused great losses, but also to banks and other financial institutions Great risk, to a certain extent, disturb the normal development of the national economy. Evaluation of traditional real estate investment is the discounted cash flow method, which the project is greater than 0, the net present value basis, to determine whether the project is feasible. This method is simple and easy to operate, and has some scientific, has been in use ever since. But in recent years, more and more scholars have pointed out the disadvantages over the method, because this method of project evaluation does not consider itself the flexibility to project management features, and project future earnings is determined by the market, we can not Accurately predict in advance, so that the method in the application of many problems encountered in the process, and sometimes even lead to wrong decisions. The emergence of real option methods for solving this problem provide a theoretical support. The method can more fully take into account the uncertainty of future revenue projects, and manage flexible, able to accurately and objectively evaluate the value of the project, is a relatively scientific and reasonable method. But studies have generally only consider a project developed by the developer contains the option value, without taking into account factors of competitors, which does not conform to reality.This article will introduce the theory of option games area real estate investment, real estate investment project evaluation to establish the option game model, to consider follow - the first to follow the game and non - pre-empt the game both cases, the analysis of the leader and followers Value function, and given the option between the two optimal execution strategy. In addition, given the real estate market may exist more than three or three cases of developers, to extend the model to explore the potential competitors on the market leaders and followers when the strike strategy. Finally, a practical case for comparison. the two evaluation methods were compared to verify the proposed method is reasonable.Application of the Option game method to evaluate real estate investment projects to avoid the shortcomings of traditional evaluation methods can be more precise evaluation of the value of real estate investment projects and thus the timing of the optimal investment is more advanced.