Title: Patent-related decision-making with fuzzy real option analysis

Authors: Xiaolu Wang; Christer Carlsson

Addresses: Institute for Advanced Management Systems Research, Åbo Akademi, Joukahaisenkatu 3-5 A, 20520 Turku, Finland ' Institute for Advanced Management Systems Research, Åbo Akademi, Joukahaisenkatu 3-5 A, 20520 Turku, Finland

Abstract: Patent-related decision-making tasks are essentially equivalent to justifying investment opportunities, which requires the estimation of initial cost and potential future benefits and a valuation model that can effectively exploit them. This article reviews three conventional patent valuation models and identifies four major issues that hamper their applicability in realistic cases. It then proceeds to propose two techniques, namely fuzzy set theory and real option analysis, and advocate them as a solution to those issues. It will also be shown by examples how two fuzzy real option analysis-based models could be utilised to facilitate the decision-making problems encountered in patent application and patent commercialisation.

Keywords: fuzzy real options; patenting decision making; patent valuation; cash flow; patents; investment justification; fuzzy set theory; patent applications; patent commercialisation.

DOI: 10.1504/IJMOR.2016.079807

International Journal of Mathematics in Operational Research, 2016 Vol.9 No.4, pp.467 - 486

Received: 22 Dec 2014
Accepted: 30 Mar 2015

Published online: 23 Sep 2016 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article