Real options in finance
Bart M. Lambrecht
Journal of Banking & Finance, 2017, vol. 81, issue C, 166-171
Although the academic literature on real options has grown enormously over the past three decades, the adoption of formal real option valuation models by practitioners appears to be lagging. Yet, survey evidence indicates that managers’ decisions are near optimal and consistent with real option theory. We critically review real options research and point out its strengths and weaknesses. We discuss recent contributions published in this issue of the journal and highlight avenues for future research. We conclude that, in some ways, academic research in real options has catching up to do with current practice.
Keywords: Real option; Capital budgeting (search for similar items in EconPapers)
JEL-codes: G13 G31 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:jbfina:v:81:y:2017:i:c:p:166-171
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