How to Evaluate and Invest in Emerging A/E/C Technologies under Uncertainty
This article has been corrected.
VIEW CORRECTIONPublication: Journal of Construction Engineering and Management
Volume 129, Issue 1
Abstract
Many emerging architectural/engineering/construction (A/E/C) technology investments are of strategic importance and may create future growth opportunities. Therefore, from the strategic perspective, management needs a better method that can quantify the strategic value of technology investment and suggest optimal investment strategies when the future is uncertain. This paper presents a quantitative valuation method based on modern option pricing theory for evaluating major investments in emerging A/E/C technologies. This framework considers specifically the technology investment risk and embedded managerial options. It further aligns the investment evaluation process with the financial market. The analysis may help A/E/C firms more accurately evaluate investments in emerging technologies, such as information technology and automation, and make strategic investment decisions under uncertainty.
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Published In
Journal of Construction Engineering and Management
Volume 129 • Issue 1 • February 2003
Pages: 16 - 24
Copyright
Copyright © 2003 American Society of Civil Engineers.
History
Received: Dec 20, 2000
Accepted: Feb 26, 2002
Published online: Jan 15, 2003
Published in print: Feb 2003
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