Real Estate Investment Decision Based On Option Game

Real estate industry, one of the important industries to promote the development of our national economy, has appeared the phenomenon of housing for greater than required at this stage, especially the housing unsalable phenomenon in the third and fourth tier cities. In view of this phenomenon, the “destocking” policy was put forward in the thirteenth five-year plan in 2015 on China’s real estate industry,which also indicates that many years of real estate development boom in china will fade and will be no longer a profitable investment. So for the real estate enterprises, it is an urgent need to consider and solve the problem of that how to use the right investment decision methods, seize the opportunities in the unstable market environment, and invest and gain profits.Optionality and competitiveness in real estate investment market make solving the problem of investment decision-making process that is under uncertainty and solving the game theory that influenced by mutual decision of player combined. Option game method produced by these two theories overcame the imitations of the traditional investment decision, which was used extensively by estate investment companies before. The method is also being increasingly recognized by scholars and business oligopoly and duopoly option game model.On this basis, using options game approach, considering the real estate industry market demand and real estate enterprise investment cost as random variable, this paper establishes preferential model, no preemptive model and Symmetric three oligopoly game model which applied in the real estate investment decision, through the analysis of the equilibrium solution and strategy game model, the research shows that compare with preferential model, in the non-preemption game model, leaders will delay the investment and get more profits. The investment critical value of the first investment enterprise in the symmetric three oligopoly game model must meet certain standards, according to the exists of the first investment critical value, the model is divided into three companies sequential investment and two companies simultaneously investment; the first investment critical value among investment companies duopoly the critical value of an investment in leadership and investment threshold oligopolies. Finally, this paper establish symmetric three oligopoly game model through specific case, and have a explanation to conclusion. These researches aim to supplement and extend symmetric double oligopoly game, while enrich option game model in real estate investment decision, it also offer theoretical basis and practice guidance for policymaker in real estate investment.