New procedure for valuing patents under imprecise information with a consensual dynamics model and a real options framework

摘要

In this paper we present a new procedure for patent selection and ranking that uses a new dynamic consensus model and a new variant of the Matching Method real options framework. The procedure utilizes opinions from multiple experts in the creation of a stream of consensual yearly cash-flows for each patent. The cash-flow stream is used as an input in continuous-time real option valuation of each patent. Continuous time analysis of the patents allows for optimizing the timing of dropping patents from the portfolio. The procedure is relatively easy to apply in a practical setting, and is consistent with financial theory. Using the procedure is illustrated with a numerical example. Ranking result sensitivity to parameter value selection is studied separately. (C) 2017 Elsevier Ltd. All rights reserved.