 Model PropertiesChristian Artmann ()
Chapter 4 in The Value of Information Updating in New Product Development, 2009, pp 1-27 from Springer Abstract: Abstract Having developed a general valuation framework that combines Bayesian updating with real options analysis in the previous chapter, this chapter aims at analyzing the model and deriving properties in closed form.We will hereby study 1) how the project value changes if the uncertainty is reduced through an information update, 2) under which conditions it will be most beneficial to conduct an update, and 3), how the underlying cost structure influences the derived results. For the derivation of these properties it is insightful to maintain the distinction between the two perspectives (ex ante and ex post) as discussed in the previous chapter. We will start with an analysis of the corresponding properties of an information update once the signal is observed and hence, known. These results can then be applied to the analysis of the actual point of interest, namely model properties in expectation of a later information update. Keywords: Model Property; Identical Project; Uncertainty Reduction; Market Requirement; Prior Variance (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-540-93833-0_4 Ordering information: This item can be ordered from DOI: 10.1007/978-3-540-93833-0_4 Access Statistics for this chapter More chapters in Lecture Notes in Economics and Mathematical Systems from Springer |
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