Forthcoming in Academy of Management Review Comment: Real Option Pricing and Organizations: The Contingent Risks of Extended Theoretical Domains
نویسندگان
چکیده
ion. We suggest that formal methods of real option pricing have an important stake in the domain of positive theory regarding the market valuation of investments under uncertainty. As happens in science, the extension of these methods to other domains confronts new data and modeling challenges. Several innovations have been
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Response Real Options Pricing and Organizations: the Contingent Risks of Extended Theoretical Domains
As options models move from financial markets to corporate decision making, it is fitting to question the simple domain extension of option pricing theory by considering behavioral decision-making biases. We suggest, however, that, given the negative evolutionary consequences of ignoring optionlike investments, organizations invent heuristic rules to counter these biases. We propose the idea of...
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