Reports on a survey which asked 82 experienced managers from various functions, business levels, and industries to value case studies which were in effect real options on growth. Compares these empirical valuations with theoretical values derived from a specific real options model (European...

Birth and death may be a better model than Brownian motion for many physical processes, which real options models will increasingly need to deal with. In this paper, we value a perpetual American call option, which gives the monopoly right to invest in a market in which the number of active...

We analyze the incentives of firms to delay patenting a product they intend to commercialize to maximize the period they can exploit the market under patent protection. We model the patenting and market-launching decisions and consider partial financing of these costs with debt. Agency conflicts...

The origin and applications of learning curves. Learning curves were first noticed by aircraft producers before World War II. The time taken to assemble a new type of aircraft diminished with each successive airframe built. Typically, the time taken for assembly had dropped by 20% each time the...

The accounts of a large retailer showed statistical evidence that shrinkage (stock loss) was being measured with serious error. As a result, profit itself in many departments was seriously in error. These errors tended to wash out over large areas of the business, but at local level, serious...