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    Université de Fribourg

    COG-FPOM: adapted fuzzy pay-off method for real options valuation : application in the abandonment decision of petroleum producing fields

    Borges, R.E.P. ; Meier, Andreas

    (Internal working papers DIUF ; 17-01)

    This paper presents the COG-FPOM, a model based on the Fuzzy Pay-Off Method (FPOM). The FPOM is a scenario-based real option valuation method that uses fuzzy numbers as possibility distributions. The paper shows an unexpected result generated by the original FPOM, in which the real option would have a negative value. It further analyses its reasons and suggests a way to overcome it, by using the...