Rita McGrath

Real Options as Engines of Choice and Heterogeneity

Coauthor(s): Walter Ferrier, Aubrey Mendelow.

Four different concepts of real options are prevalent in the literature: 1) option value as a component of the total value of the firm; 2) a specific investment with option-like properties; 3) choices that might pertain to one or more of such proposals; and 4) the use of options reasoning as a heuristic for strategy. A point in common across definitions is that option value derives from two properties of an investment: future choices and the potential for proprietary access to the outcome for the investing firm.

Source: Academy of Management Review
Exact Citation:
McGrath, Rita, Walter Ferrier, and Aubrey Mendelow. "Real Options as Engines of Choice and Heterogeneity." Academy of Management Review 29, no. 1 (January 2004): 86-101.
Volume: 29
Number: 1
Pages: 86-101
Date: 1 2004
Descriptors: Schools of Economic Thought and Methodology Mathematical and Quantitative Methods Business Administration and Business