Modeling sequential R&D investments: a binomial compound option approach
B. Hauschild, D. Reimsbach, Business Research 8 (2014) 39–59.
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| English
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Hauschild, Bastian;
Reimsbach, DanielLibreCat
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Abstract
<jats:title>Abstract</jats:title><jats:p>In this paper, we propose a binomial approach to modeling sequential R&D investments. More specifically, we present a compound real options approach, simplifying the existing valuation methodology. Based upon the same set of assumptions as prior models, we show that the number of computational steps for valuing any compound option can be reduced to a single step. We demonstrate the applicability of our approach using the real-world example of valuing a new drug application. Overall, our work provides a heuristic framework for fostering the adoption of binomial compound option valuation techniques in R&D management.</jats:p>
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Business Research
Volume
8
Issue
1
Page
39-59
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Hauschild B, Reimsbach D. Modeling sequential R&D investments: a binomial compound option approach. Business Research. 2014;8(1):39-59. doi:10.1007/s40685-014-0017-5
Hauschild, B., & Reimsbach, D. (2014). Modeling sequential R&D investments: a binomial compound option approach. Business Research, 8(1), 39–59. https://doi.org/10.1007/s40685-014-0017-5
@article{Hauschild_Reimsbach_2014, title={Modeling sequential R&D investments: a binomial compound option approach}, volume={8}, DOI={10.1007/s40685-014-0017-5}, number={1}, journal={Business Research}, publisher={Springer Science and Business Media LLC}, author={Hauschild, Bastian and Reimsbach, Daniel}, year={2014}, pages={39–59} }
Hauschild, Bastian, and Daniel Reimsbach. “Modeling Sequential R&D Investments: A Binomial Compound Option Approach.” Business Research 8, no. 1 (2014): 39–59. https://doi.org/10.1007/s40685-014-0017-5.
B. Hauschild and D. Reimsbach, “Modeling sequential R&D investments: a binomial compound option approach,” Business Research, vol. 8, no. 1, pp. 39–59, 2014, doi: 10.1007/s40685-014-0017-5.
Hauschild, Bastian, and Daniel Reimsbach. “Modeling Sequential R&D Investments: A Binomial Compound Option Approach.” Business Research, vol. 8, no. 1, Springer Science and Business Media LLC, 2014, pp. 39–59, doi:10.1007/s40685-014-0017-5.
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