In the performance evaluation process, using the classic data envelopment analysis (DEA) models, decision making units (DMUs) are considered as black boxes. While in many cases and different applications such as investment funds, banks, insurance companies, etc., DMUs have a network structure. In addition, in many network structures, some of the indicators used to calculate the efficiency...

The research addresses the management dilemma of a decrease in the number of capital project investments, due to the current methods of capital budgeting (i.e. net present value analysis using discounted cash flows) being ineffective, because it does not effectively deal with uncertainty in the investment, and also does take management's flexibility into account. It has been determined that a s...

Introduction One of ASTHO’s key goals is to help its jurisdictions meet member needs for technical assistance, including making informed decisions about their syndromic surveillance options. To help them make such decisions, ASTHO worked with Booz Allen to create a decision analysis model, which factors in both a Value of Information (VOI) model and a Return on Investment (ROI) model. The model...

This paper experimentally investigates investment behavior. We find that global risk – i.e. risk independent of an agent’s investment decision (like political risk) – substantially decreases investment. Also, if the capital used for investment is based on previous earnings (effort) instead of an endowment, investment decreases substantially. These results are neither in line with expected utili...

An important class of investment decisions is characterized by unrecoverable sunk costs, resolution of uncertainty through time, and the ability to invest in the future as an alternative to investing today. The options model provides guidance in such settings, including an investment decision rule called the bad news principle: the downside investment state influences the investment decision, w...

Entrepreneurs often face undiversifiable idiosyncratic risks from their business investments. Motivated by this observation, we extend the standard real options approach to investment to an incomplete markets environment and analyze the joint decisions of business investments, consumption-saving and portfolio selection. We show that precautionary saving motive affects the investment timing deci...

By mixing concepts from both game theoretic analysis and real options theory, an investment decision in a competitive market can be seen as a “game” between firms, as firms implicitly take into account other firms’ reactions to their own investment actions. We review several real option game models, suggesting which critical problems have been “solved” by considering game theory, and which sign...