A real options framework for R&D planning in technology-based firms

摘要

The increasing uncertainty in technology and market trends makes it difficult for technology firms to capture emerging opportunities. This paper develops an R&D planning framework based on the real options analysis to identify, develop and evaluate technological opportunities. The developed methodology can encourage R&D organizations to proactively explore uncertainties and to identify managerial options to capture emerging opportunities. Furthermore, the developed real options model integrated with the Bass diffusion model can help R&D managers evaluate and select optimal investment decisions to maximize market payoff under different demand structures. The case of a biochip R&D project is studied. (C) 2014 Elsevier B.V. All rights reserved.