Real Options and Investment under Uncertainty: Classical Readings and Recent Contributions [Paperback]

Eduardo S. Schwartz (Editor), Lenos Trigeorgis (Editor)

Book Description

Publication Date: August 20, 2004

The study of investment under uncertainty was stagnant for several decades, until recent developments in real options provided the tools to revitalize the field. The techniques and insights derived from option pricing can now be used to quantify the elusive elements of managerial operating flexibility and strategic interactions ignored or underestimated by conventional Net Present Value and other quantitative approaches.Topics covered include the reasons for the under-investment problem and conceptual frameworks for viewing productive investment opportunities as real options; useful valuation building blocks; the quantifying of various types of real options separately and in combination; strategic aspects of investment under uncertainty; numerical analysis techniques; a variety of applications, including the valuing of natural resources, R&D and pioneer ventures, land development, strategic acquisitions, government subsidies, power plants and pollution options, flexible manufacturing, and multinational operations; and empirical evidence from oil leasing, land prices, and discontinued operations.

Editorial Reviews

Review

"A book of carefully chosen readings on real options is long overdue; the recognition that nearly every serious investment decision has important embedded options has spawned a growing and vibrant literature. Real Options and Investment Uncertainty will be an indispensable reference for both the practitioner who is looking for guidance and the academic who would like to know more about this new research area." Stephen Ross, Franco Modigliani Professor of Finance and Economics, Massachusetts Institute of Technology

About the Author

Eduardo S. Schwartz is the California Professor of Real Estate and Professor of Finance, Anderson Graduate School of Management, the University of California, Los Angeles.

Lenos Trigeorgis is Professor of Finance, School of Economics and Management, the University of Cyprus, and President of the Real Options Group.

Product Details

• Paperback: 881 pages
• Publisher: The MIT Press (August 20, 2004)
• Language: English
• ISBN-10: 0262693186
• ISBN-13: 978-0262693189
• Product Dimensions: 9 x 7 x 1.6 inches
• Shipping Weight: 3 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #1,268,754 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

1 of 1 people found the following review helpful:

4.0 out of 5 stars Good Collection of Articles, April 22, 2008

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C. Ang "cliff_ang" (Chicago, IL) - See all my reviews
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This review is from: Real Options and Investment under Uncertainty: Classical Readings and Recent Contributions (Paperback)

This textbook provides the student with a good collection of papers on fundamental aspects of real options. Traditional NPV analysis gets a trashing by this book and the proponents of real options analysis. Of course, there is some merit to it or else many prominent academics would not waste their time discussing the issues. There is a good blend of theoretical and empirical papers, and the papers discuss a variety of applications from the traditional natural resource investment to real estate.