A Real Options Approach to Contractual Agreements and Value Flexibility

Authors

  • Gaston Milanesi

  • Fernando Tohme

Keywords:

contracts, transaction costs, real options

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

How to Cite

Gaston Milanesi, & Fernando Tohme. (2014). A Real Options Approach to Contractual Agreements and Value Flexibility. Global Journal of Management and Business Research, 14(C2), 61–66. Retrieved from https://journalofbusiness.org/index.php/GJMBR/article/view/1398

A Real Options Approach to Contractual Agreements and Value Flexibility

Published

2014-01-15