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The Real Options Approach to Intellectual Capital Analysis: A Critique

Knowledge and Process Management, Vol. 12, No. 3, pp. 217-224, 2005

Posted: 22 May 2007 Last revised: 14 Dec 2007

Andreas Andrikopoulos

University of the Aegean - Department of Business Administration

Abstract

The real options paradigm serves as a new platform in the evaluation of intellectual capital assets. A prominent case of real options applications in intellectual capital is R&D investment, since R&D constitutes a major part of a firm 's structural capital as well as a major field of real-options applications. First, we describe the real-options approach to the evaluation of R&D investment, focusing on modeling assumptions and the pricing approaches. Then, we present an extensive account of the opportunities that the real options analysis lends to intellectual capital quantitative methods. We also study the issues that need to be tackled so that the quantifying norms of real options can be adapted to complex features of the real-world business environment.

Suggested Citation

Andrikopoulos, Andreas, The Real Options Approach to Intellectual Capital Analysis: A Critique. Knowledge and Process Management, Vol. 12, No. 3, pp. 217-224, 2005. Available at SSRN: https://ssrn.com/abstract=987704

Andreas Andrikopoulos (Contact Author)

University of the Aegean - Department of Business Administration ( email )

8 Michalon Str
Chios, GR 82 100
Greece

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