Valuation of Project Using Game Theory and Real Options

The paper focuses on the application of real options methodology. This is the decision-making approach, which reflects the risk and the flexibility. If there is a duopoly market and firms may decide, depending on the competitor's decision, the game theory can be used. There is in the paper described and investigated a hybrid game real options decision model of valuation of project. The underlying random process will be demand defined by geometric Brown's process. First will be shortly described the main approaches of real options and game theory. In the application part is calculated the value of option to expand, using the real data. In conclusion, the results are evaluated and the recommendation will be added.