The decision analysis of market entry with game options concept

Abstract

This manuscript introduces the concept of game options pricing model to build an approach by the decision analysis to create a bi-national market and two firm's competitive market entry behavior. The production system, market entry, and marketing strategy will face high risk uncertainty in the future; the flexible management value derived from decision-making is not only made now, but may be also made in the future. The project value for the market entry strategy can be evaluated by the real options approach which combines the mixture strategic game concept so as to decide the entry threshold, entry timing, and expected potential market entry value. This game options approach can provide the other concept for the decision analysis in some optimal solutions which is evaluated by the traditional approach of operational research.