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2868. Fuzzy Real Options and Game Theory Approach in M&A Pricing Issue
Invited abstract in session WD-57: Real Option Analysis, stream Real Option Analysis.
Wednesday, 14:30-16:00Room: S06 (building: 101)
Authors (first author is the speaker)
| 1. | Qiyuan Dai
|
| Finance, Technical University of Ostrava |
Abstract
In today's business landscape, mergers and acquisitions (M&A) are a crucial strategy for growth and development. However, M&A deals often fail due to discrepancies in valuation. To address this issue, this paper aims to present a unique approach to estimating M&A prices by combining fuzzy real options methodology and game theory. By calculating the sum of a company's intrinsic value and M&A incremental value with fuzzy real options, we arrive at an M&A price. However, we find that this price can be influenced by the negotiation process. To determine the final target price during bargaining, the game theory is employed. Our study applies this method to a real case and results show a range of M&A prices that closely match the actual transaction price. This pricing methodology has practical value for corporate decision-making and is particularly relevant in today's competitive and uncertain market environment.
Keywords
- Revenue Management and Pricing
- Fuzzy Sets and Systems
- Game Theory
Status: accepted
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