A Real Options Model of Real Estate Development with Entitlement Risk
将开发许可过程建模为复合实物期权的一个阶段，开发商通过早期投资获取许可，从而获得后续延迟建设的选择权，并用手工收集的重新分区申请数据检验了模型预测。
Abstract Most development projects encounter a highly uncertain entitlement process that is largely uncontrollable by developers. In this study, entitlement is modeled as a separate stage within a compound real option, where developers begin with minimal control (maximum risk) and each successful stage increases control (decreases risk). We solve the model analytically, provide three‐dimensional numerical comparisons, and empirically test the model's predictions using hand collected rezoning petitions. Our main result refines the classic development option model: developers first invest early (secure entitlements) in order to obtain the option to subsequently delay investment (construct the optimal building at the optimal time).