Research on E-Business Investment Decision Making Based on Option Games

摘要

The theory of option games being the combination of two successful theories, namely real options and game theory, has a great potential to applications in many real situations. E-business investment has the character of large scale and high uncertainty.This paper employs the option games model to research the E-bank investment decision-making.The real option method can avoid the pitfall of Net Present Value(NPV) approach for e-business investment decision-making. But it ignores the interaction between competitors. In the light of the problems existing in e-business investment decision- making, this paper employs the option games models to study the decision-making for e-business investment. It can consider the key factors such as uncertainty, flexibility, and timing, the effect of competition for each firm.