OVERVIEW

Real R&D options are usually embedded in projects or processes, where management has the on-going capacity to alter the R&D investment timing, amounts and/or ultimate project, or downsize or abandon the R&D. In contrast to real property and real resource options, it is difficult to accurately predict discoveries or estimate future unit sales of R&D products, and there is no established forward unit price market.

There are some excellent classics on real R&D options, starting some 20 years ago, which were not originally considered real options, but where the R&D discovery, volume of sales, as well as the unit prices of the development were considered uncertain. Over the last five years, there has been a growth of real R&D option models, applied to a host of industries, especially biotechnology, e-commerce, internet and telecommunications, as well as the exploration phase of natural resources.

This book contains seven articles (most of which have been revised) presented at the symposium on real R&D options held at Manchester Business School on 12 July 2000, and published in the April 2001 issue of the R&D Management journal (Chapters 2, 3, 4, 5, 8, 9, 13). In addition there are six new papers (Chapters 6, 7, 10, 11, 12, 14), which were discussed in the MBS autumn 2001 doctoral finance seminar by the participants, Jos Azevedo-Pereira, Jo o Duque, Sydney Howell, I-Doun Kou, Jongwoo Lee, David Newton, Helena Pinto and Siqin Xu.

There are nine relatively new models and four new...