The online retail sales are expected to reach $191 billion in 2011 from a meager $36 billion in 2001 (Schonfeld 2010). Different business models have emerged with numerous pure-play online players (e.g., Amazon.com) competing with dual-channel (i.e., brick-and-mortar and online channel) firms (e.g., Best Buy and Wal-Mart). Online channel can reduce search costs of buyers (Bakos 1991) and provid...

We propose theoretical improvement to the Silva & Santiago (2009) valuation model for innovative projects and discuss a practical application. We discuss some points of the model and include a minimum sales function, which decreases in time. In order to test the model, we performed the valuation of an existing project. This project has multiple sources of uncertainty and managerial flexibility ...

IT investments are usually risky by nature and account for a considerable part of annual investment budgets. Though value-based IT portfolio management (ITPM) aims at sustained economic growth and long-term value creation regarding IT investments, companies often fail to implement a synchronized ITPM approach that considers all relevant risk-/return components within IT investment valuation. In...

A main issue in valuation modeling is the correct choice of the stochastic process that better describes the asset price performance. Particularly, in investment projects that show a high level of managerial flexibility in conditions of uncertainty – for which it would be proposed the real option valuation models – the assumption of a specific process can have an impact not only on the project ...

A Note on Ending Inventory Valuation in Multiperiod Production Scheduling Wilco van den Heuvel • Albert P.M. Wagelmans Econometric Institute Report EI 2002-25 Econometric Institute, Erasmus University Rotterdam, PO Box 1738, 3000 DR Rotterdam, The Netherlands [email protected] • [email protected] June 2002 In a recent paper, Fisher et al. (2001) present a method to mitigate end-effect...

In this paper we extend the Least Squares Monte Carlo approach proposed by Longstaff and Schwartz for the valuation of American-style contingentclaims to the case of life insurance contracts. These contracts, in fact, often embed an American-style option, called surrender option, that entitles its owner to early terminate the contract and receive a cash amount, called surrender value. The addit...

Valuing IT investments in hypercompetitive business environments remains an elusive task as traditional valuation tools fail to model inherent uncertainty. Real-options analysis presents a viable alternative to traditional valuation tools in planning and valuing IT investments in uncertain business environments. While much has been written about the quantitative and valuation aspects of real op...

Valuation ultimately refers to the contribution of an item to meeting a specific goal or objective. Conventional economic valuation is based on the goal of allocative efficiency. But other social goals may be equally, if not more, important. For example, the goals of social fairness and ecological sustainability have been identified as being at least of the same level of importance as allocativ...

This paper discusses the standard welfare economics assumption anthropocentric welfarism, i.e. that only human well-being counts intrinsically. New survey evidence from a representative sample in Sweden is presented, indicating that anthropocentrism is strongly rejected, on average. However, most people appear to have a consequentialistic ethics, in line with conventional welfare economics. The...