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Option Games: The Interface Between Optimal Stopping and Game Theory

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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. Emlyon Business School, Écully, France

    Benoît Chevalier-Roignant

  2. Bank of Cyprus Chair Professor of Finance, University of Cyprus, Nicosia, Cyprus

    Lenos Trigeorgis

Authors
  1. Benoît Chevalier-Roignant
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  2. Lenos Trigeorgis
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Corresponding author

Correspondence to Benoît Chevalier-Roignant .

Editor information

Editors and Affiliations

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

    John Baillieul

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

    Tariq Samad

Section Editor information

  1. Princeton University, Princeton, NJ, USA

    Rene Carmona

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Chevalier-Roignant, B., Trigeorgis, L. (2021). 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_41-2

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

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  • Publisher Name: Springer, London

  • Print ISBN: 978-1-4471-5102-9

  • 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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