For an option to have significant economic value, there has to be:

* A restriction exists on competition in the event of the contingency.
** In a perfectly competitive product market, no contingency, no matter how positive, will generate positive net present value.
* Real options are most valuable when you have exclusivity.
* Real options become less valuable as the barriers to competition become less steep.
bag
finance_public
created
Fri, 13 Jan 2012 17:59:28 GMT
creator
dirkjan
modified
Fri, 13 Jan 2012 17:59:28 GMT
modifier
dirkjan
tags
Mr
Real Options
creator
dirkjan