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Option‐Game Approach to Analyze Technology Innovation Investment under Fuzzy Environment

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  • Yingshuang Tan
  • Yong Long

Abstract

Based on the model of symmetric and asymmetric duopoly option game, this paper discusses the present value of profit flows and the sunk investment costs for the trapezoidal fuzzy number. It constructs the fuzzy expressions of the investment value and investment threshold of followers and leaders under fuzzy environment and conducts numerical analysis. This offers a kind of explanation to the investment strategies under fuzzy environment.

Suggested Citation

  • Yingshuang Tan & Yong Long, 2012. "Option‐Game Approach to Analyze Technology Innovation Investment under Fuzzy Environment," Journal of Applied Mathematics, John Wiley & Sons, vol. 2012(1).
    • Handle: RePEc:wly:jnljam:v:2012:y:2012:i:1:n:830850
    DOI: 10.1155/2012/830850
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    References listed on IDEAS

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    1. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474, December.
    2. Grenadier, Steven R, 1996. "The Strategic Exercise of Options: Development Cascades and Overbuilding in Real Estate Markets," Journal of Finance, American Finance Association, vol. 51(5), pages 1653-1679, December.
    3. Grzegorz Pawlina & Peter M. Kort, 2006. "Real Options in an Asymmetric Duopoly: Who Benefits from Your Competitive Disadvantage?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(1), pages 1-35, March.
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    Cited by:

    1. Haifang Cheng & Weilai Huang & Jianhu Cai, 2013. "Solving a Fully Fuzzy Linear Programming Problem through Compromise Programming," Journal of Applied Mathematics, John Wiley & Sons, vol. 2013(1).

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