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.
Published Version
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