TY - JOUR
T1 - Influence of investor subjective judgments in investment decision-making
AU - Liu, Yu hong
AU - Jiang, I. ming
N1 - Funding Information:
We acknowledge the helpful comments and suggestions provided by the reviewers for the International Review of Economics and Finance. The authors are grateful to their research assistant, Ching-liang Chang, for his assistance. We also thank the valuable comments from the participants in 16th International conference on Computing in Economics and Finance and the financial support from the National Science Council, Taiwan (R.O.C.) for joining this conference.
PY - 2012/10
Y1 - 2012/10
N2 - By extending the results of previous literature, this study contributes to propose a fuzzy stochastic model for valuing the option to invest in an irreversible investment. The proposed model can provide reasonable ranges of option value, which investors can use to either exercise the option to invest or to delay investment. According to the right and left values of the triangular fuzzy number, investors can interpret the optimal difference based on their individual subjective judgments regarding volatility of future investment values. Finally, in this study two fuzzy goal examples are used to illustrate that the permissible fuzzy option values of pessimistic investors are relatively narrow to optimistic investors.
AB - By extending the results of previous literature, this study contributes to propose a fuzzy stochastic model for valuing the option to invest in an irreversible investment. The proposed model can provide reasonable ranges of option value, which investors can use to either exercise the option to invest or to delay investment. According to the right and left values of the triangular fuzzy number, investors can interpret the optimal difference based on their individual subjective judgments regarding volatility of future investment values. Finally, in this study two fuzzy goal examples are used to illustrate that the permissible fuzzy option values of pessimistic investors are relatively narrow to optimistic investors.
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U2 - 10.1016/j.iref.2012.01.002
DO - 10.1016/j.iref.2012.01.002
M3 - Article
AN - SCOPUS:84862817860
SN - 1059-0560
VL - 24
SP - 129
EP - 142
JO - International Review of Economics and Finance
JF - International Review of Economics and Finance
ER -