Real Option Applications to Information Security

Communications & Strategies, No. 70, p. 15, 2nd Quarter 2008

11 Pages Posted: 6 Mar 2009  

Pythagoras Petratos

University of Oxford - Said Business School

Date Written: March 5, 2009

Abstract

Real options present advantages over the standard discounting methods. In this paper we analyze them briefly and examine their potential applications on information security. The applications of real options on valuation of information assets, information security investment and capital budgeting provide considerable benefits. Finally portfolios of real options and other financial products can reduce information security risk.

Keywords: Real options, information security, valuation, information security investment, capital budgeting, portfolio theory, information security risk

JEL Classification: L86, D46, D89, E22, G11, G12, G31

Suggested Citation

Petratos, Pythagoras, Real Option Applications to Information Security (March 5, 2009). Communications & Strategies, No. 70, p. 15, 2nd Quarter 2008. Available at SSRN: https://ssrn.com/abstract=1354085

Pythagoras Petratos (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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