The timing of adoption of positron emission tomography: a real options approach.

This paper presents the economic evaluation from a hospital's perspective of the investment in positron emission tomography, adopting a real options approach. The installation of this equipment requires a major capital outlay, while uncertainty on several key variables is substantial. The value of several timing strategies, including sequential investment, is determined taking into account that future decisions will be based on the information available at that time. The results show that adopting this approach may have an impact on the timing of investment, because postponing the investment may be optimal even when the Expected Net Present Value of the project is positive.