2009
DOI: 10.1155/2009/817137
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Fuzzy Real Options in Brownfield Redevelopment Evaluation

Abstract: Real options modeling, which extends the ability of option pricing models to evaluate real assets, can be used to evaluate risky projects because of its capacity to handle uncertainties. This research utilizes possibility theory to represent private risks of a project, which are not reflected in the market and hence are not fully evaluated by standard option pricing models. Using a transformation method, these private risks can be represented as fuzzy variables and then priced with a fuzzy real options model. … Show more

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Cited by 15 publications
(10 citation statements)
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“…In the last two decades, various evaluation approaches and index systems have been proposed to evaluate urban brownfield redevelopment including a life cycle inventory model [12], the rough set approach [1], the multi-attribute decision method (MADM) and analytical hierarchy process (AHP) [13,14], fuzzy real options [15], multi-criteria genetic algorithm [16], multi-hierarchical grey evaluation modeling [17], system dynamics model [18], general organizational logic model [19], GIS spatial analysis [20], spatial explicit algorithm assessment [21], grey cluster methods [22], emergy-based assessment [11], and structural equation modeling [23,24]. However, all these approaches were used to evaluate brownfield in developed countries, whereas less attention has been paid in developing countries like Pakistan.…”
Section: Introductionmentioning
confidence: 99%
“…In the last two decades, various evaluation approaches and index systems have been proposed to evaluate urban brownfield redevelopment including a life cycle inventory model [12], the rough set approach [1], the multi-attribute decision method (MADM) and analytical hierarchy process (AHP) [13,14], fuzzy real options [15], multi-criteria genetic algorithm [16], multi-hierarchical grey evaluation modeling [17], system dynamics model [18], general organizational logic model [19], GIS spatial analysis [20], spatial explicit algorithm assessment [21], grey cluster methods [22], emergy-based assessment [11], and structural equation modeling [23,24]. However, all these approaches were used to evaluate brownfield in developed countries, whereas less attention has been paid in developing countries like Pakistan.…”
Section: Introductionmentioning
confidence: 99%
“…This idea can be extended to tackle the private risk problem [4]. When the effects of private risk are not negligible and expert estimation is unavoidable, fuzzy real options may be more appropriate than (crisp) real options, even though the models are more complex.…”
Section: Private Risks and Fuzzy Real Optionsmentioning
confidence: 99%
“…To use fuzziness to deal with private risks. we apply real options with fuzzy parameters to produce fuzzy real options models [4,5]. Because aggregating multiple descriptive factors is critical in making human judgments, we develop a fuzzy multicriteria analysis technique to aggregate a DM's multiple descriptive judgments, using his or her preference to determine the parameters of a fuzzy real options model.…”
Section: Introductionmentioning
confidence: 99%
“…In Jackson (2004a), the author also discusses analyses of case studies, emphasizing the need for using a variety of procedures for evaluation and for relying on market data where possible. further methods for valuation were proposed such as option pricing methods (lentz and Tse, 1995), mortgage-equity analysis (Chalmers and Jackson, 1996), adjusting all-risk-yield and by percent value reduction (richards, 1997), monte-Carlo-simulation (Weber, 1997), a sciencebased integrated Triad approach (Weber et al, 2008) or fuzzy real options (Wang et al, 2009). syms (1997) introduces a risk assessment model for the assessment of stigma attached to the past or present industrial use of a site.…”
Section: Literature Review On the Assessment Of Marketability Risksmentioning
confidence: 99%