A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investments

  title={A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investments},
  author={Michel Benaroch and Robert J. Kauffman},
  journal={Information Systems Research},
The application of fundamental option pricing models (OPMs), such as the binomial and the Black-Scholes models, to problems in information technology (IT) investment decision making have been the subject of some debate in the last few years. Prior research, for example, has made the case that pricing “ real options” in real world operational and strategic settings offers the potential for useful insights in the evaluation of irreversible investments under uncertainty. However, most authors in… CONTINUE READING
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