Studies On The Optimal Investment Opportunity Of Private Pension Institutions

With the acceleration of the aging process of China’s population,the supply of old-age care services is far from being able to meet the growing demand of old-age care services at present.Under this background,the model of home-care services for the elderly purchased by government emerges as an innovation.Now studies of the model at home and abroad are generally focused on the necessity and advantages of the mode,or the difficulties and solutions in development,but there are no scholars discussed the optimal investment time of institutions under the mode,at the same time,pension institutions also lack the corresponding theoretical basis for investment decisions of related projects at present.Therefore,this paper can not only enrich the research content of this model,but also provide scientific guidance for pension institutions to make correct investment decisions on such projects.In order to quantify the optimal investment opportunities for pension institutions,this article is based on real option theory,and constructs the optimal investment decision model of the institution in the case of single and multiple mechanisms according to the assumption of complete information condition and incomplete information condition,then we get proper differential equation under principle of maximization option value of investment by the derivation,and the optimal investment time along with influencing factors of the mechanism are discussed systematically and deeply by solving the equation.In addition,this paper solves the optimal investment opportunities under different conditions by taking X pension center as a specific case.Finally,this paper summarizes the findings of the study,and suggests that the government should maintain the competitive environment of the market,and strengthen the support of relevant policies and the construction of relevant mechanisms and systems,the institution should focus on improving its service quality and brand awareness,and avoid blind investment.Through theoretical research and numerical simulation,this paper draws the following main conclusions:(1)under the single mechanism condition and the multiagency incomplete information condition,we will get the explicit expressions of the optimal investment critical population by derivation,if the expected number of project participants is no less than this critical number,then the institution reaches the optimal investment opportunity;(2)under the multiagency incomplete information condition,if the expected number of project participants is lower than the minimum investment population or higher than the optimal investment critical population,theinstitutions will choose to wait or invest respectively;if it is in between,the institution will continue to wait when all other participants have not reached the minimum investment population,otherwise it should invest;(3)the increase of service charge,the extension of project duration and the reduction of operation cost make the optimal investment critical population of the institution decrease,but the project value remains unchanged,while the volatility of the initial investment and the number of participants have a positive impact on both;(4)the low expected rate of return of the project and the high expected growth rate of the number of participants lead to high project value,and make the optimal investment critical population higher in the case of low competition or no competition,or lower in the case of high competition;(5)the reduce of the project expected returns and the increase of the expected population growth lead to the increase of the optimal investment critical population or the decrease of the minimum investment population,while the initial investment and the average cost of the project have a positive impact on both,and the average charge and the operating years have a negative impact on both,and the volatility only has a positive impact on the optimal investment critical population.(6)competition among other participants in the project makes the optimal investment time of the institution in the case of multiple institutions advance compared with the case of single institution.Institutions investing in related projects can also learn from the research conclusions to identify and adjust their own optimal investment opportunities.