Risk Value of Emerging Technology Products and Their Diffusion through Use of a CASWN-CE and Real Options Approach

摘要

The rapid development of emerging technology products (ETPs) in China's mar-ket makes it important to evaluate and forecast ETPs diffusion. Due to the high uncertainty of ETP marketing and inadequate marketing data of China ETPs mar-kets, the traditional forecasting methods cannot be applied to effectively measure it. We use cellular automata embedded small world network (CASWN) and cross-entropy (CE) divergence to measure the differences of the ETP adopters' spatial distribution. The empirical analysis indicates the success probabilities of ETPs can be predicted effectively though CASWN and CE divergence, which can make a pre-cise judgment for the market prospect of an ETP in the shortest time after an ETP launch. Based on this, we can calculate the expected cash flow accurately and the option value of an ETP project for sound decision-making. In the meantime, the CE threshold value of success of ETPs in China market is obtained only by the spatial data of early-stage after an ETP launch, not rely on time series data. So a new tool is provided for the prediction and venture capital policy of an ETP launch in this article.