Decision support for firm performance by real options analytics
Abstract
This paper develops a real options decision support tool for raising the performance of the firm. It shows how entrepreneurs can use our intuitive tool quickly to assess the nature and type of action required for improved performance. This exploits our estimated econometric relationship between precipitators of entrepreneurial opportunities, time until exercise, and firm performance. Our 3D chromaticity plots show how staging investments, investment time, and firm performance support entrepreneurial decisions to embed, or to expedite, investments. Speedy entrepreneurial action is securely supported with this tool, without expertise in econometric estimation or in formulae for real options valuation.
Citation
Power , B & Reid , G C 2018 , ' Decision support for firm performance by real options analytics ' , Managerial and Decision Economics , vol. 39 , no. 1 , pp. 56-64 . https://doi.org/10.1002/mde.2867
Publication
Managerial and Decision Economics
Status
Peer reviewed
DOI
10.1002/mde.2867ISSN
0143-6570Type
Journal article
Collections
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