Electronic Commerce Investment Under Condition Of High Uncertainty: A Real Options Approach

Abstract

Why managers in electronic commerce investment projects should pay attention to real options logic when they operate in unpredictable environment? Whether existing of real options’ reasoning in these kinds of investments led to better performance and enables firms to manage, handles uncertainty and risk effectively, and minimizes any unexpected results? Which kind of uncertainty will be reduced by using real options reasoning? In the present study, we explore how real options’ reasoning has been conceptualized in the information technology and electronic commerce investment decision processes that are subject to multiple sources of uncertainties. Finally, we show that real options reasoning does not always enhance project performance under conditions of higher uncertainty. We conclude with implications for future empirical research hope that our study stimulates future work on real options and electronic commerce investment. Keywords: uncertainty perception, e- commerce investment, real options, flexibility, project performance