A Note on Project Risk and Option Values of Investments in Information Technologies.

Author List: Kumar, Ram L.;
Journal of Management Information Systems, 1996, Volume 13, Issue 1, Page 187-193.
Justification of investments in information technologies is an important research topic in the information systems area. Several approaches have been proposed. One of these highlights the deficiencies of traditional economic justification based on net present value, and proposes the use of techniques based on financial option pricing theory. This paper examines the relationship between project risk and option values of investments in new information technologies and illustrates how this relationship is significantly different from well-known results in the case of financial option pricing. Conditions for determining the desirability of risky projects are derived.
Keywords: information-system economics; information-technology investments; real options.
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List of Topics

#267 0.191 options real investment option investments model valuation technology value analysis uncertainty portfolio models using context intuitive managerial regret uncertain case
#293 0.155 values culture relationship paper proposes mixed responsiveness revealed specific considers deployment results fragmentation simultaneously challenges explain attribute building indicated obtain
#294 0.115 development systems methodology methodologies information framework approach approaches paper analysis use presented applied assumptions based proposed described examines basis proposes
#143 0.104 value business benefits technology based economic creation related intangible cocreation assessing financial improved key economics assess question created create understanding
#170 0.080 information processing needs based lead make exchange situation examined ownership analytical improved situations changes informational examine developed receive perceptions facilitates
#135 0.073 project projects development management isd results process team developed managers teams software stakeholders successful complex develop contingencies problems greater planning
#264 0.069 risk risks management associated managing financial appropriate losses expected future literature reduce loss approach alternative mitigate failures failure cause mitigation
#222 0.061 research researchers framework future information systems important present agenda identify areas provide understanding contributions using literature studies paper potential review