The Study on B2B Exchange of Real Options in the Secondary Market and Its Impact on the Supply Chain

This project proposes an unprecedented study of the secondary market for real option trading and its impact on supply chain management. Real options entail a right for delivery of particular goods at a particular time, place, and price to hedge price and supply risks and to reduce costs. The project will develop an analytical framework by building on the derivative and game theory approaches, which have proved effective in preliminary and previous studies, to (1) capture and analyze characteristics of the secondary market of real options, (2) assess its effects, to guide the search of optimal strategies for each party, and (3) establish conditions under which B2B exchanges are efficient and sustainable. For the market participants identified for the study, this research will provide business models and solutions for facilitating the options trading to improve demand and supply coordination through e-platforms. The study will not only lead to improved industrial practice but also open research opportunities as fundamental as multi-objective optimization or as exciting as cross-disciplinary advance in e-commerce, supply chain management, management science, and industrial management.