Abstract
A new product development process is usually under economic and technical uncertainties, and adjustable to the arrival of new information. As a result, new product development is not a one-time decision but a dynamic process under uncertainties. This paper applies repeated real options to derive optimal decision-making rules for a firm that faces two repeated options: 1) an incremental innovation project that is relatively easy to be developed and 2) a radical innovation project that offers superior performance but its development is much more difficult. Our findings can help firms make dynamic investment decisions on coexisting new product development projects.
| Original language | English (US) |
|---|---|
| Article number | 6193169 |
| Pages (from-to) | 157-168 |
| Number of pages | 12 |
| Journal | IEEE Transactions on Engineering Management |
| Volume | 60 |
| Issue number | 1 |
| DOIs | |
| State | Published - 2013 |
All Science Journal Classification (ASJC) codes
- Strategy and Management
- Electrical and Electronic Engineering