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Journal of Applied Mathematics
Volume 2014, Article ID 635898, 7 pages
http://dx.doi.org/10.1155/2014/635898
Research Article

Fuzzy Optimization of Option Pricing Model and Its Application in Land Expropriation

College of Economics and Business Administration, Chongqing University, Chongqing 400044, China

Received 11 April 2014; Accepted 8 June 2014; Published 17 July 2014

Academic Editor: Jian-Wen Peng

Copyright © 2014 Aimin Heng et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Option pricing is irreversible, fuzzy, and flexible. The fuzzy measure which is used for real option pricing is a useful supplement to the traditional real option pricing method. Based on the review of the concepts of the mean and variance of trapezoidal fuzzy number and the combination with the Carlsson-Fuller model, the trapezoidal fuzzy variable can be used to represent the current price of land expropriation and the sale price of land on the option day. Fuzzy Black-Scholes option pricing model can be constructed under fuzzy environment and problems also can be solved and discussed through numerical examples.