Real options modeling, which extends the ability of option pricing models to evaluate real assets, canbe used to evaluate risky projects because of its capacity to handle uncertainties. This research utilizespossibility theory to represent private risks of a project, which are not reflected in the market and henceare not fully evaluated by standard option pricing models. Using a transformation method, these privaterisks can be represented as fuzzy variables and then priced with a fuzzy real options model. This principleis demonstrated by valuing a brownfield redevelopment project using a prototype decision supportsystem based on fuzzy real options. Because they generalize the original model and enable it to dealwith additional uncertainties, fuzzy real options are entirely suitable for the evaluation of such projects.
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