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Clarke, L and Herrmann, G (2004) Cost vs. production: disparities in social housing construction in Britain and Germany. Construction Management and Economics, 22(05), 521-32.

Gil, N, Tommelein, I D and Ballard, G (2004) Theoretical comparison of alternative delivery systems for projects in unpredictable environments. Construction Management and Economics, 22(05), 495-508.

Lewis, T M (2004) The construction industry in the economy of Trinidad & Tobago. Construction Management and Economics, 22(05), 541-9.

Miller, C J M, Packham, G A, Pickernell, D G and Mcgovern, M (2004) Building for the future: the potential importance of the construction industry in Welsh economic development policy. Construction Management and Economics, 22(05), 533-40.

Ng, F P and Björnsson, H C (2004) Using real option and decision analysis to evaluate investments in the architecture, construction and engineering industry. Construction Management and Economics, 22(05), 471-82.

  • Type: Journal Article
  • Keywords: Decision analysis; real option; investment evaluation; sequential decision-making; market
  • ISBN/ISSN: 0144-6193
  • URL: https://doi.org/10.1080/01446190310001649074
  • Abstract:

    Many architecture, engineering and construction (AEC) professionals would like to use real option (RO) and decision analysis (DA) to evaluate alternatives in investment in the face of uncertainty. However, they have difficulty deciding which one to use and many are not aware of the subtle differences in assumptions and techniques between the two methodologies. We explain how DA and RO can be applied in complete and incomplete markets and what implicit assumptions we need to be aware of in each scenario. Through a toll road example, it is shown that, in a complete market, DA and RO give the same valuation regardless of the choice of the utility function. A formula is provided for pricing any investment in a complete market. The paper also discusses why the values calculated using DA and RO differ in an incomplete market and when DA is more appropriate than RO and vice versa

Ng, S T, Cheung, S-O, Skitmore, M and Wong, T C Y (2004) An integrated regression analysis and time series model for construction tender price index forecasting. Construction Management and Economics, 22(05), 483-93.

Phua, F T T (2004) Modelling the determinants of multi-firm project success: a grounded exploration of differing participant perspectives. Construction Management and Economics, 22(05), 451-9.

Poon, C S, Yu, A T W and Jaillon, L (2004) Reducing building waste at construction sites in Hong Kong. Construction Management and Economics, 22(05), 461-70.

Wu, C-H, Hsieh, T-Y, Cheng, W-L and Lu, S-T (2004) Grey relation analysis of causes for change orders in highway construction. Construction Management and Economics, 22(05), 509-20.