Valuation and Strategies for Investment on Automation and Robotics

Abstract

This paper presents a quantitative valuation method for automation/robotics investments based on modern option pricing theory in finance. This framework explicitly considers the investments' uncertainty/risk and embedded managerial options. It further aligns the valuation of the investments with the market opinions. The analysis may help construction firms more accurately compute the value of automation/robotics investments, and provide useful strategies with respect to various automation/robotics investments.