Real options as engines of choice and heterogeneity

Rita Gunther McGrath; Walter J. Ferrier; Aubrey L. Mendelow

doi:10.5465/AMR.2004.11851720

Real options as engines of choice and heterogeneity

Rita Gunther McGrath, Walter J. Ferrier, Aubrey L. Mendelow

Management

Research output: Contribution to journal › Review article › peer-review

222 Scopus citations

Abstract

Four characterizations of options exist: (1) as a component of total firm value, (2) as specific projects, (3) as choices, and (4) as a heuristic for strategic investment. Option value exists when two conditions apply: future choices and potential for proprietary access to outcomes. Narrower boundary conditions are inconsistent with theory and incomplete for application. The option lens has promise for its power to shed economic insight into behavioral processes.

Original language	English
Pages (from-to)	86-101
Number of pages	16
Journal	Academy of Management Review
Volume	29
Issue number	1
DOIs	https://doi.org/10.5465/AMR.2004.11851720
State	Published - Jan 2004

ASJC Scopus subject areas

General Business, Management and Accounting
Strategy and Management
Management of Technology and Innovation

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10.5465/AMR.2004.11851720

Cite this

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abstract = "Four characterizations of options exist: (1) as a component of total firm value, (2) as specific projects, (3) as choices, and (4) as a heuristic for strategic investment. Option value exists when two conditions apply: future choices and potential for proprietary access to outcomes. Narrower boundary conditions are inconsistent with theory and incomplete for application. The option lens has promise for its power to shed economic insight into behavioral processes.",

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Real options as engines of choice and heterogeneity

Abstract

ASJC Scopus subject areas

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