Cultural ecosystem service (CES) constitutes a growing field of researches in integrated land planning, among which is how to optimize the provision to nearby neighborhoods. Thus an understanding of the value of CES appreciated by residents needs to be developed. Stated preference methods are popular in valuing CES, among which, willingness to pay (WTP) is the most widely used way. But still, i...

The main purpose of this paper is to propose a fuzzy approach for investment project valuation in uncertain environments from the aspect of real options. The traditional approaches to project valuation are based on discounted cash flows (DCF) analysis which provides measures like net present value (NPV) and internal rate of return (IRR). However, DCF-based approaches exhibit two major pitfalls....

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Stated preference (SP) surveys attempt to obtain monetary values for non-market goods that reflect individuals’ “true” preferences. Numerous empirical studies suggest that monetary values from SP studies are sensitive to survey design and so may not reflect respondents’ true preferences. This study examines the effect of time framing on respondents’ willingness to pay (WTP) for car safety. We e...

This study investigates whether or not the scale bias found in contingent valuation (CVM) studies on mortality risk reductions is a result of cognitive constraints among respondents. Scale bias refers to insensitivity and non near-proportionality of the respondents’ willingness to pay (WTP) to the size of the risk reduction. Two hundred Swedish students participated in an experiment where their...

In this article we show how a project’s option value increases with incremental levels of investment and dis-investment flexibility. We do this by presenting two NPV and seven option pricing models in a strict sequence of increasing flexibility. We illustrate each with numerical examples and determine the maximum value that a project option could ever support. We show that managerial considerat...

This paper investigates an interaction between the managerial flexibility and the competition in a dynamic situation. The value of the flexibility can be valued as a real option while the competition can be analyzed with the game theory. We consider a multi-stage game with two firms under demand uncertainty. In the model, One firm called firm L firstly makes an investment decision, and the othe...

In the 1990’s, the World Agroforestry Centre (ICRAF) initiated a domestication programme of indigenous fruit trees (IFTs) in Southern Africa to increase farmhousehold income through farmer-led tree planting and thus conserve bio-diversity. From the farmer's point of view planting domesticated IFTs is an investment under uncertainty and irreversibility. As timing of planting is flexible, real op...

We optimize network flow by minimizing network blocking and/or delay and by modeling network routing possibilities as real options. The uncertainties in the network are driven by stochastic point-to-point demands and we consider correlations among them in a general network structure. We derive an analytical approximation for the blocking/delay probabilities and solve the optimal network flows b...

A common practice in real estate markets is the sale of housing development units before completion, and in some cases even before beginning of the actual construction, known as presale. Developers that choose to presell units are subject to default on the part of the buyers if market conditions become unfavorable. In recent years, court rulings in Brazil have established that developers must r...