Developing real option game models

Alcino Azevedo, Dean Paxson

Research output: Contribution to journalArticlepeer-review


By mixing concepts from both game theoretic analysis and real options theory, an investment decision in a competitive market can be seen as a ‘‘game’’ between firms, as firms implicitly take into account other firms’ reactions to their own investment actions. We review two decades of real option game models, suggesting which critical problems have been ‘‘solved’’ by considering game theory, and which significant problems have not been yet adequately addressed. We provide some insights on the plausible empirical applications, or shortfalls in applications to date, and suggest some promising avenues for future research.
Original languageEnglish
Pages (from-to)909-920
Number of pages12
JournalEuropean Journal of Operational Research
Issue number3
Early online date10 Feb 2014
Publication statusPublished - 16 Sept 2014

Bibliographical note

© 2014, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


  • finance
  • real option games
  • investment analysis
  • strategic investment


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