Real Option Binomial Model on RD Investment Decision Under Competition

摘要

Based on the summarization of the deficiencies in traditional investment theories, the option game property of Research & Development(R&D) investment is presented in this paper. According to the competing condition of the two sides in a game and the exclusiveness in options, the game strategy matrix of R&D investment is established. The binominal option pricing model is applied in the competitive situation, and the game option is extended from single-phase to two phases. The option values and corresponding strategy combinations of R&D investment are analyzed quantitatively, and the influence of technology investment type and competitor reaction type on R&D investment decision-making is discussed. Finally, further research directions and suggestions are presented.