The Decision of Enterprises during the Process of Technological Innovation Diffusion Based on Real Option Theory
Business School, Central South University, 410083 Changsha Hunan, China
Based on real option theory, the article analyses the decision-making of enterprises during the process of technological innovation diffusion under an uncertain circumstance. Under the assumption that the returns of enterprises follow geometric Brownian motion, the article firstly estimates the transition value of imitating technology innovators and the average latency of imitation, then it analyses the influence of every parameter on the diffusion process. It can be concluded that both the market demand and the rate have significant effects on the diffusion rate of innovative technology.
Key words: technological innovation / technological innovation diffusion / real option / geometric brownian motion
© Owned by the authors, published by EDP Sciences, 2014
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