Real Options and Game Theory: When should Real Options Valuation be applied?

At a recent conference on real options, a delegate from a telecommunications company raised the following query in response to a speaker from a firm of management consultants. Paraphrasing somewhat, he said: “You’ve stressed the importance of ‘holding the option’ and delaying investment decisions. Last month a consultant from your company advised my firm, a telecoms company, to act decisively, stressing the importance of committing to the market and seizing the advantage over our rivals. Isn’t all this rather contradictory?” The reply cast little light on this apparent conflict, amounting to little more than “Well, real options can’t be applied everywhere.”