Infrastructure Investment as a Real Options Game: The Case of European Airport Expansion
Year: 2003
Type: article
Abstract: This paper analyzes the optional and strategic features of infrastructure investment. Infrastructure investments generate other investment opportunities, and in so doing change the strategic position of the enterprise. A combination of real options theory and game theory can capture the elusive value of a firm's strategic modification of its position in the industry. My model focuses on a particular application, the analysis of European airport expansion. Airports with better infrastructures and low blocking potentials capture a strategic position, because they are in a better positiion to exercise growth options that they share with competitors in the industry.
Source: Financial Management
DOI: 10.2307/3666135
Author: Han Smit
Institution: Erasmus University Rotterdam
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3123476367