A Real Options Approach to Contractual Agreements and Value Flexibility

Gaston Milanesi

A Real Options Approach to Contractual Agreements and Value Flexibility

Gast´on Milanesi §

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Fernando Tohm´e

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§ Universidad Nacional del Sur

A Real Options Approach to Contractual Agreements and Value Flexibility

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Abstract

Contracts are usually analyzed in the light of the reduction of transaction costs that they may ensure. But this disregards the advantages of strategic flexibility in business relations. In this paper we consider a model of provider-client relation and see how flexibility in the contract (seen as a combination of a put and a call option) ensures a higher payoff to the involved parties.

References

22 Cites in Article

Reference Format

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Gast´on Milanesi, Fernando Tohm´e. 2014. "A Real Options Approach to Contractual Agreements and Value Flexibility". Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 14 (GJMBR Volume 14 Issue 9 (C2)).

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GJMBR Volume 14 Issue 9 (C2)

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

contracts Real options transaction costs

Classification

GJMBR-C Classification JEL Code: P34

Submission ReceivedDecember 13, 2013
Peer Review Double Blind
Handling Editor
Accepted January 5, 2014
Published March 17, 2014

Version of record

v1.2

Issue date

March 17, 2014

Language

English

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Article Matrices

Total Score: 102

Country: Unknown

Subject: Global Journal of Management and Business Research - C: Finance

Authors: Gaston Milanesi, Fernando Tohme (PhD/Dr. count: 0)

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Publish Date: 2014 03, Tue

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Total Views: 1.7K

Total Downloads: 119

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