A fuzzy pay-off method for real option valuation.
Thoughts about Selected Models for the Valuation of Real Options
This paper discusses option valuation logic and four selected methods for the valuation of real options in the light of their modeling choices. Two of the selected methods the Datar–Mathews method and the Fuzzy Pay-off Method represent later developments in real option valuation and the Black & Scholes formula and the Binomial model for option pricing the more established methods used in real option valuation. The goal of this paper is to understand the big picture of real option valuation models...
An n-ary λ-averaging based similarity classifier
We introduce a new n-ary λ similarity classifier that is based on a new n-ary λ-averaging operator in the aggregation of similarities. This work is a natural extension of earlier research on similarity based classification in which aggregation is commonly performed by using the OWA-operator. So far λ-averaging has been used only in binary aggregation. Here the λ-averaging operator is extended to the n-ary aggregation case by using t-norms and t-conorms. We examine four different n-ary norms and...
Combining System Dynamic Modeling and the Datar–Mathews Method for Analyzing Metal Mine Investments
This paper presents how a dynamic system model can be used together with the Datar–Mathews real option analysis method for investment analysis of metal mining projects. The focus of the paper is on analyzing a project from the point of view of the project owner. The paper extends the Datar–Mathews real option analysis method by combining it with a dynamic system model. The model employs a dynamic discount rate that changes as the debt-level of the project changes. A numerical case illustration of...
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