IDEAS home Printed from https://ideas.repec.org/a/fzy/fuzeco/vixy2004i1p3-18.html
   My bibliography  Save this article

Computing Competencies Value Through A Fuzzy Real Option Model

Author

Listed:
  • Cannavacciuolo, Lorella
  • Iervolino, Luigi
  • Iandoli, Luca
  • Zollo, Giuseppe

    (University of Naples Federico II)

Abstract

This paper presents a fuzzy real option model for the estimation of the value of an investment in individual compe-tencies. The use of the real option technique is justified on the basis of the following hypotheses: i) either deve-loping or acquiring a competency is a financial investment; ii) the value of such an investment can be estimated by assuming that the decision made by a firm either to develop or acquire an individual competency can be consi-dered as buying an option today that will allow the firm itself to exploit a market opportunity in the future by implementing a new productive process Pj; iii) the uncertainty concerning the future value of an investment can be evaluated through a fuzzy model for the estimation of the volatility of the investment itself. Traditional models proposed in literature for the estimation of the volatility are unable to cope with the lack of historical and reliable data that are usually available in financial investments. Second, those models can manage only uncertainty of probabilistic nature. The model proposed attempts to estimate the volatility of an invest-ment when the uncertainty come from possibilistic sources and data are given by imprecise estimations given by human experts assessing the benefits deriving form the implementation of new productive processes.

Suggested Citation

  • Cannavacciuolo, Lorella & Iervolino, Luigi & Iandoli, Luca & Zollo, Giuseppe, 2004. "Computing Competencies Value Through A Fuzzy Real Option Model," Fuzzy Economic Review, International Association for Fuzzy-set Management and Economy (SIGEF), vol. 0(1), pages 3-18, May.
  • Handle: RePEc:fzy:fuzeco:v:ix:y:2004:i:1:p:3-18
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Keywords

    competence; fuzzy logic; intangible investments; real option; volatility.;

    JEL classification:

    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fzy:fuzeco:v:ix:y:2004:i:1:p:3-18. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aurelio Fernandez). General contact details of provider: http://edirc.repec.org/data/sigefea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.