Real Options: Taking Stock and Looking Ahead

Yong Li, Barclay E. James, Ravi Madhavan, Joseph T. Mahoney

Research output: Chapter in Book/Report/Conference proceedingChapter


We discuss recent developments in real options theory and its applications to strategic management research, examine the potential difficulties in implementing real options in theory and practice, and propose several areas for future research. Our review shows that real options theory has provided substantial insights into investment and exit decisions as well as into the choice of investment modes. In addition, extant research studies have contributed significantly to our understanding of whether and how organizations can benefit from real options. Future research that addresses difficulties in applications will further advance both real options theory and practice in strategic management. We call for future generations of research to enhance the impact of real options as an emerging dominant conceptual lens in strategic management.

Original languageEnglish (US)
Title of host publicationReal Options Theory
EditorsJeffrey Reuer, Tony Tong
Number of pages36
StatePublished - 2007
Externally publishedYes

Publication series

NameAdvances in Strategic Management
ISSN (Print)0742-3322

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management


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