Research On Green Building Investment Decision Based On Real Option Theory

In the current social industry,the industry with the largest energy consumption is the construction industry,which accounts for about one-third of the total global energy consumption.Environmental pollution and energy consumption restrict the development of the construction industry.Therefore,driven by the needs of the macro environment and the current situation of energy scarcity,green buildings have emerged naturally,providing a new direction for the construction sector.Green buildings uphold the principles of green balance and local conditions.On the basis of maximizing energy conservation,protecting the environment,and reducing pollution,they provide humans with healthy and comfortable living,learning,and office spaces,striving to minimize the impact on the environment.The growth of industry demand,and the improvement of residents’ consumption levels all provide the foundation for the development of green buildings.The development of the green building industry has become one of the main development directions of Chinese real estate industry.Although green building has good development prospects and market demand,there are still many problems in its development process.First of all,the investment timing is unclear.Compared with traditional real estate development projects,green building projects have higher initial investment amounts and longer investment payback periods.There are also problems with excessively high incremental costs in the design and construction process,which makes it impossible for investors to enter the market easily to miss the best investment opportunity.Secondly,it is difficult to make decisions on uncertain issues.There are many high-risk and uncertain issues in all stages of green buildings.Compared with traditional real estate development projects,the current decision-making research on the uncertain issues in the construction process of green building projects is still very lacking.Therefore,this paper conducts research on green building investment decision-making from two stages.The first stage is use the method of combining real option theory and game theory before investors enter the green building market and start to invest.First of all,building an option game model for green building investment projects.Secondly,establishing investors as followers,leaders and the three hypothetical situations of joint investment by two developers.In these three situations,the critical value of investment value and the best time to invest are determined through the calculation of the model.Finally,the investment decisions under these three situations are analyzed,and getting the influencing factors.The second stage is the stage that investors entered the green building market,they still face many uncertainties in the various processes of the project and need to make investment decisions.According to this situation,the binary tree option pricing model is introduced,and expansion options,deferred options,and abandonment options are established respectively.Based on the option binary tree pricing model,it is concluded that the net present value of the option value of the green building investment project under three different situations,the expansion option,the delay option,and the abandonment option,are obtained and analyzed.Finally,when the investor faces multiple options at the same time if this situation exists,a binary tree model of comprehensive selection options will be established,and the most favorable option will be analyzed for execution,so as to maximize the profit margin.In addition,this paper introduces an example to demonstrate,establishes an option game model and a binary tree deferred option pricing model to calculate and analyze the investment decisions of the first and second phases of green building projects,and finally solves the green building project based on the deduced calculation results.The optimal investment time of the first-phase project and whether the second-phase project will delay investment.This paper has introduced real option theory and option game theory into green building investment decision-making,and has achieved certain results.It will provide green building investors with a novel and reasonable investment decision-making method,and also will provide support to the theoretical research for green building investment decision-making.