Abstract

http://ssrn.com/abstract=1505399
 
 

References (26)



 
 

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Strategic Options and Expert Systems: A Fruitful Marriage


Carlo Alberto Magni


University of Modena and Reggio Emilia - Department of Economics

Giovanni Mastroleo


Università degli Studi della Calabria

Marina Vignola


Università degli studi di Modena e Reggio Emilia (UNIMORE)

Gisella Facchinetti


Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics

2004

Soft Computing, Vol. 8, No. 3, pp. 179-192, 2004

Abstract:     
Business economics does not provide any methodology for appraising strategic investments, relying on informal approaches. Conversely, financial economics offers us plenty of sophisticated mathematical models unsuitable for applications and based on unrealistic assumptions. This paper presents an example of how strategic investments may be handled with a formal but easy-to-undersand tool. While this paper shows a specific application, a real-life case, we think the model here proposed may be generalized, so contributing to developing a new approach to business decisions. In particular, we think of a fuzzy expert system approach as a convenient tool overwhelming many of the shortcomings inherent in the “crisp” approaches of the financial literature (DCF methods, options pricing, dynamic programming), while avoiding at the same time the refusal of any methodology (typical of business economics). The idea here presented develops some results by Magni et al. (2001) and Facchinetti et al. (2001). An evaluation function is drawn up via “if-then” rules; the latter are made to work automatically by means of an expert system, which adequately replicates the evaluation of human experts. A sensitivity analysis is presented to test the soundness of the model.

Number of Pages in PDF File: 20

Keywords: strategic, real options, fuzzy expert system, sensitivity analysis

JEL Classification: C63, C67, C88, D81, G11, G31

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Date posted: November 15, 2009  

Suggested Citation

Magni, Carlo Alberto and Mastroleo, Giovanni and Vignola, Marina and Facchinetti, Gisella, Strategic Options and Expert Systems: A Fruitful Marriage (2004). Soft Computing, Vol. 8, No. 3, pp. 179-192, 2004. Available at SSRN: http://ssrn.com/abstract=1505399

Contact Information

Carlo Alberto Magni (Contact Author)
University of Modena and Reggio Emilia - Department of Economics ( email )
Viale Berengario 51
Modena, Modena 41121
Italy
Giovanni Mastroleo
Università degli Studi della Calabria ( email )
Italy
Marina Vignola
Università degli studi di Modena e Reggio Emilia (UNIMORE) ( email )
Viale A. Allegri 9
Modena, Modena 42121
Italy
Gisella Facchinetti
Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics ( email )
Viale Berengario 51
41100 Modena, Modena 41100
Italy
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