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Option Games: The Interface Between Optimal Stopping and Game Theory

Encyclopedia of Systems and Control

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Abstract

Managers can stake a claim by committing to capital investments today that can influence their rivals’ behavior or take a “wait-and-see” or step-by-step approach to avoid possible adverse market consequences tomorrow. At the core of this corporate dilemma lies the classic trade-off between commitment and flexibility. This trade-off calls for a careful balancing of the merits of flexibility against those of commitment. This balancing is captured by option games.

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Author information

Authors and Affiliations

  1. Oliver Wyman, Munich, Germany

    Benoit Chevalier-Roignant

  2. University of Cyprus, Nicosia, Cyprus

    Lenos Trigeorgis

Authors
  1. Benoit Chevalier-Roignant
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  2. Lenos Trigeorgis
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Editor information

Editors and Affiliations

  1. Electrical and Computer Engineering, Boston University, Boston, Massachusetts, USA

    John Baillieul

  2. Automation and Control Solutions, Honeywell, Golden Valley, Minnesota, USA

    Tariq Samad

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© 2014 Springer-Verlag London

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Chevalier-Roignant, B., Trigeorgis, L. (2014). Option Games: The Interface Between Optimal Stopping and Game Theory. In: Baillieul, J., Samad, T. (eds) Encyclopedia of Systems and Control. Springer, London. https://doi.org/10.1007/978-1-4471-5102-9_41-1

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  • DOI: https://doi.org/10.1007/978-1-4471-5102-9_41-1

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  • Publisher Name: Springer, London

  • Online ISBN: 978-1-4471-5102-9

  • eBook Packages: Springer Reference EngineeringReference Module Computer Science and Engineering

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Chapter history

  1. Latest

    Option Games: The Interface Between Optimal Stopping and Game Theory
    Published:
    03 February 2021

    DOI: https://doi.org/10.1007/978-1-4471-5102-9_41-2

  2. Original

    Option Games: The Interface Between Optimal Stopping and Game Theory
    Published:
    21 May 2014

    DOI: https://doi.org/10.1007/978-1-4471-5102-9_41-1

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