""Strategic Investment: Real Options and Games" provides a powerful synthesis of modern corporate finance and corporate strategy. Its arrival could not be more timely for the practice of strategic management. Cumulative developments in finance science and innovations in financial technology over the past three decades have had a profound impact on financial markets and financial institutions globally. However, their influence on the practice of strategic corporate finance has been far more limited. That is changing and as a consequence one can anticipate significant opportunities for innovation in strategic advice and its implementation in the impending future. Who better to prepare us for it than Han Smit and Lenos Trigeorgis, with their combined experiences as serious academic researchers, skilled consultants, and seasoned teachers? Their carefully constructed text uses actual case settings and hypothetical situations to exemplify the power of combining real options and game theory to clarify and quantify strategic analysis of the firm. Whether MBA student or seasoned professional, the reader is in for a treat: Bon Appetit!"--Robert C. Merton, Harvard Business School and Nobel Laureate in Economic Sciences

"This excellent book builds bridges across two dimensions. First, it synthesizes the real options approach to capital investment and game-theoretic analysis of strategic interactions. Second, it spans sophisticated theory and business practice. Academics as well as business managers can learn from it and enjoy its wonderfully clear exposition."---Avinash Dixit, author of "Lawlessness and Economics"

"A tour de force. This book unifies two major strands of economic theory--realoptions and games--into a single, coherent framework, and then shows how these ideas can be applied to the formulation of corporate strategy. With deep knowledge, enlivened by zest and humor, the authors take the reader to the forefront of current thinking."--Carliss Y. Baldwin, William L. White Professor of Business Administration, Harvard Business School, coauthor of "Design Rules: The Power of Modularity"

"In the study of investment decisions, it has been common to focus on either the financial or the strategic aspects of an investment. This admirable book combines the two perspectives, using the tools of real options and game theory. With its wide-ranging and eclectic assortment of theoretical models and case studies, the book will prove useful to students, practitioners, and researchers."--Robert L. McDonald, Erwin P. Nemmers Distinguished Professor of Finance, Kellogg School of Management, Northwestern University, author of "Derivatives Markets"

"This book promises to have a very significant impact on the field of strategic management. For years, the field has struggled to find a way of reconciling two contradictory views: flexibility is good vs. commitment is good. Smit and Trigeorgis provide the framework and tools to evaluate when each strategy will create shareholder value. Very well written, the book provides a wealth of interesting examples. It will certainly be of interest to the strategy/investment analyst and MBA student."--Karel Cool, BP Chaired Professor of European Competitiveness, INSEAD

"This timely pioneering book by preeminent authorities in the field provides a powerful introduction to the combination of two important modern tools for investmentdecisions--real options and game theory. These tools are being increasingly used by consultants and firms. Smit and Trigeorgis show that it is possible to be straightforward and clear when analyzing real investments and framing business plans using sophisticated tools like real options and games. They bypass complexity and focus on intuition and applicability, providing a rich practical framework allowing the reader to analyze investment strategy with eagle-eyed wisdom. Even the most rigorous reader will recognize the power of simplicity in analyzing complex business problems and the richness of the case applications. It is the ideal text not only for undergraduate and MBA students but also for consultants and managers, who will finally get the first readable book on this topic."--Marco A.G. Dias, Petrobras

It is widely accepted that a large proportion of acquisition strategies fail to deliver the expected value. Globalizing markets characterized by growing uncertainty, together with the advent of new competitors, are further complicating the task of valuing acquisitions. Too often, managers rely on flawed valuation models or their intuition and experience when making risky investment decisions, exposing their companies to potentially costly pitfalls. "Playing at Acquisitions" provides managers with a powerful methodology for designing and executing successful acquisition strategies. The book tackles the myriad executive biases that infect decision making at every stage of the acquisition process, and the inadequacy of current valuation approaches to help mitigate these biases and more realistically represent value in uncertain environments.

Bringing together the latest advances in behavioral finance, real option valuation, and game theory, this unique playbook explains how to express acquisition strategies as sets of real options, explicitly introducing uncertainty and future optionality into acquisition strategy design. It shows how to incorporate the competitive dynamics that exist in different acquisition contexts; acknowledge and even embrace uncertainty; identify the value of the real options embedded in targets; and more.

Rooted in economic theory and featuring numerous real-world case studies, "Playing at Acquisitions" will enhance the ability of CEOs and their teams to derive value from their acquisition strategies, and is also an ideal resource for researchers and MBAs.

It is widely accepted that a large proportion of acquisition strategies fail to deliver the expected value. Globalizing markets characterized by growing uncertainty, together with the advent of new competitors, are further complicating the task of valuing acquisitions. Too often, managers rely on flawed valuation models or their intuition and experience when making risky investment decisions, exposing their companies to potentially costly pitfalls. Playing at Acquisitions provides managers with a powerful methodology for designing and executing successful acquisition strategies. The book tackles the myriad executive biases that infect decision making at every stage of the acquisition process, and the inadequacy of current valuation approaches to help mitigate these biases and more realistically represent value in uncertain environments. Bringing together the latest advances in behavioral finance, real option valuation, and game theory, this unique playbook explains how to express acquisition strategies as sets of real options, explicitly introducing uncertainty and future optionality into acquisition strategy design. It shows how to incorporate the competitive dynamics that exist in different acquisition contexts, acknowledge and even embrace uncertainty, identify the value of the real options embedded in targets, and more. Rooted in economic theory and featuring numerous real-world case studies, Playing at Acquisitions will enhance the ability of CEOs and their teams to derive value from their acquisition strategies, and is also an ideal resource for researchers and MBAs.