The venture capital entry model on game options with jump-diffusion process

Chuan-Chuan Ko, Tyrone Lin () and Chyan Yang

International Journal of Production Economics, 2011, vol. 134, issue 1, 87-94

Abstract: This paper aims to apply game options to construct the optimal decision-making and management tool for venture capital (VC) firms. This model emphasizes the inferences with game options on the market structures formed by different competition and investment strategies of the two VC firms to reflect the investment returns. These market structures are classified into an entry-deterred game (specific monopoly), a leader's dominated strategies (duopoly), and simultaneous investment. It is considered how to select investment timing to avoid any potential competitive threats in order to provide the optimal expected threshold values for the investment decisions of VC firms.

Keywords: Venture; capital; Duopoly; market; Game; options; Jump-diffusion; process (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:134:y:2011:i:1:p:87-94

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