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Kutay Cingiz
Boost Your Policy and Investment Decision-Making Skills with Real Options Analysis
Are you looking to enhance your ability to assess investment decisions under uncertainty—whether in government, industry, or academia? Assessing Economic Policies Using the Real Options Methodology (3 ECTS) equips participants with cutting-edge tools to evaluate the value of flexibility, irreversible costs and benefits, and uncertainty in dynamic policy environments. This course goes beyond traditional cost-benefit analysis by introducing real options thinking, a powerful framework used by economists, policymakers, and strategic planners worldwide. Whether you work on climate policy, infrastructure, innovation, or agri-food transitions, mastering real options will help you make smarter, future-oriented decisions in complex and uncertain contexts. The course provides valuable analytical skills and supports your professional development in areas such as policy analysis, strategic planning, and applied research.
This course will address the issue of irreversibility from an economic point of view. Irreversible effects play a critical role in both private and public decision-making. The Precautionary Principle—widely applied in environmental policy—is rooted in concerns about the irreversible costs of certain actions (e.g., the release of GMOs). Different approaches dealing with irreversibilities have emerged in the economic literature. The two most prominent once are the quasi option and real option value theory. Application of both approaches requires technical skills most students find difficult.
The objective of the course is to introduce the origins of the quasi option value and real option values, to teach the methods most commonly used (discrete methods such as decision trees; continuous time, continuous state models using stochastic processes; Itó calculus), and to discuss and practice various applications including non-renewable resource use, technology adoption, climate change, forestry, and food- and bio-safety.
Learning outcomes
After successful completion participants are expected to be able to:
- know the economic implications and relevance of the irreversibility effect
- understand economic papers that apply real option models
- apply discrete state models for decision under uncertainty and irreversibility
- know the steps from discrete time, discrete state to continuous time, continuous stat models
- develop real option models and anlyse the results using numerical simulation methods
Activities
- Lectures on the skills needed (25%)
- Practicals deepening the skills obtained (25%)
- Course paper applying the skills obtained (50%)
Assessment
Course paper between 10 and 20 pages.
Assumed prior knowledge
Good micro-economic knowledge and in particular calculus (derivatives, integrals), basic knowledge in stochastic processes and differential equations is an advantage.
Target group
PhD candidates.
Course fees
WGS PhD's with an approved TSP: € To be announced
Other PhD's, postdocs and academic staff: € To be announced
All others: € To be announced
Cancellation conditions:
The participants can cancel their registration free of charge 1 month before the course starts. A cancellation fee of 100% applies if a participant cancels his/her registration less than 1 month prior to the start of the course.
The organisers have the right to cancel the course no later than one month before the planned course start date in the case that the number of registrations does not reach the minimum.
The participants will be notified of any changes at their e-mail addresses.
Hollandseweg 1
6706 KN Wageningen , Netherlands
