TY  - RPRT
        AU  - Bilkic, Natasa
AU  - Gries, Thomas
AU  - Naudé, Wim
        TI  - The Radical Innovation Investment Decision Refined
        PY  - 2013/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 7338
        UR  - https://www.iza.org/publications/dp7338
        AB  - We refine modelling of the radical innovation decision in this paper by extending real option theory to include non-marginal stochastic jump processes. From the model analytics we determine that the average magnitude and frequency of non-marginal stochastic jump processes are the most important parameters in this highly uncertain decision process. We show that these stochastic shocks imply that investment in radical innovation may very often be too time consuming and/or expensive to remain attractive for private entrepreneurs.
        KW  - radical innovation
KW  - innovation
KW  - entrepreneurship
KW  - investment
KW  - R&D
KW  - risk
KW  - real option theory
KW  - technology
        ER  -