Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project
As for uncertainties and decision-makers’ overconfidence psychological bias, overconfidence has been incorporated into real option decision-making model of metal mineral resources mining to estimate its effect on decision-making of the project and thus a behavioral real option decision-making model...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2014-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2014/232516 |
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| _version_ | 1832566815177310208 |
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| author | Jian-bai Huang Na Tan Mei-rui Zhong |
| author_facet | Jian-bai Huang Na Tan Mei-rui Zhong |
| author_sort | Jian-bai Huang |
| collection | DOAJ |
| description | As for uncertainties and decision-makers’ overconfidence psychological bias, overconfidence has been incorporated into real option decision-making model of metal mineral resources mining to estimate its effect on decision-making of the project and thus a behavioral real option decision-making model of metal mineral resources mining based on overconfidence has been established. Furthermore, numerical simulation and sensitivity analysis have been conducted to verify the practicality of the model. Results show that model in this paper has greatly changed trigger value and option value of mineral resources mining project compared with traditional real option model, thus greatly changing optimal decision results. Incorporating overconfidence into real option decision-making model of metal mineral resources development is a crucial extension of project evaluation theory. |
| format | Article |
| id | doaj-art-551f0c27f3974f24ae69773711f9ee2f |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2014-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-551f0c27f3974f24ae69773711f9ee2f2025-02-03T01:03:03ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2014-01-01201410.1155/2014/232516232516Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining ProjectJian-bai Huang0Na Tan1Mei-rui Zhong2School of Business, Central South University, Changsha, Hunan 410083, ChinaSchool of Business, Central South University, Changsha, Hunan 410083, ChinaSchool of Business, Central South University, Changsha, Hunan 410083, ChinaAs for uncertainties and decision-makers’ overconfidence psychological bias, overconfidence has been incorporated into real option decision-making model of metal mineral resources mining to estimate its effect on decision-making of the project and thus a behavioral real option decision-making model of metal mineral resources mining based on overconfidence has been established. Furthermore, numerical simulation and sensitivity analysis have been conducted to verify the practicality of the model. Results show that model in this paper has greatly changed trigger value and option value of mineral resources mining project compared with traditional real option model, thus greatly changing optimal decision results. Incorporating overconfidence into real option decision-making model of metal mineral resources development is a crucial extension of project evaluation theory.http://dx.doi.org/10.1155/2014/232516 |
| spellingShingle | Jian-bai Huang Na Tan Mei-rui Zhong Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project Discrete Dynamics in Nature and Society |
| title | Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project |
| title_full | Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project |
| title_fullStr | Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project |
| title_full_unstemmed | Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project |
| title_short | Incorporating Overconfidence into Real Option Decision-Making Model of Metal Mineral Resources Mining Project |
| title_sort | incorporating overconfidence into real option decision making model of metal mineral resources mining project |
| url | http://dx.doi.org/10.1155/2014/232516 |
| work_keys_str_mv | AT jianbaihuang incorporatingoverconfidenceintorealoptiondecisionmakingmodelofmetalmineralresourcesminingproject AT natan incorporatingoverconfidenceintorealoptiondecisionmakingmodelofmetalmineralresourcesminingproject AT meiruizhong incorporatingoverconfidenceintorealoptiondecisionmakingmodelofmetalmineralresourcesminingproject |