Title :
The Calculation of Volatility in Real Option Investment Decision-Making Model Using System Dynamics Models
Author :
Peng Ruohong ; Zheng Nan ; Chen Hui
Author_Institution :
Sch. of Econ. & Manage., Beijing Univ. of Posts & Telecommun., Beijing, China
Abstract :
Real options method has been increasingly used in value assessment and decision-making of investment projects. However, the determination of volatility factor in the pricing model is still an open issue. In this paper, system dynamics approach is presented, to set a model on influencing factors and decision-making process of uncertain investment projects. Acquire different volatility data of project value under varieties of situation influencing by various factors, then carry out the calculation of option value and project decision-making.
Keywords :
decision making; investment; pricing; decision making; investment project; pricing model; real option investment; system dynamics model; value assessment; volatility factor; Analytical models; Biological system modeling; Decision making; Investments; Mathematical model; Production; Uncertainty;
Conference_Titel :
Management and Service Science (MASS), 2010 International Conference on
Conference_Location :
Wuhan
Print_ISBN :
978-1-4244-5325-2
Electronic_ISBN :
978-1-4244-5326-9
DOI :
10.1109/ICMSS.2010.5576026
