Strategic Study of CAE >> 2005, Volume 7, Issue 9
Analysis on Project Investment Decision Based on Down Knock-out Option and Game Theory
1 .Jiangsu Financial Leasing Co., LTD., Nanjing 210018, China
2. Southeast University, Nanjing 210009, China
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Abstract
In this paper, firstly, the connotation and the solution of down knock-out option and the basic principle of real option are dissertated, then, the method applied in project investment decision based on down knock-out option and game theory is put forward. And the project pricing in duopoly market structure is mainly analyzed. At last, example is provided.
Keywords
down knock-out option ; real option ; game theory ; investment decision
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