A Strategic Approach to Financial Options
AbstractTo explain the strategic dimension in pricing options, it will be helpful to go back to the heart of the idea behind the concept of an option: options open up the possibility to postpone current decisions to a future point of time. Because of this flexibility additional information and new experiences can be taken into consideration. There are advantages and benefits resulting from this flexibility. The value of the option with the probabilities of the states of nature occurring. These probabilities will turn out the strategic decision variables of a new player as explained in the paper. --
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Bibliographic InfoPaper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 01/06.
Date of creation: 2006
Date of revision:
Financial Option; Real Option; Option Premium Game;
Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
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