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Table 2 Comparative statics of the base case

From: Franchise ownership redirection: real options perspective

Parameter

PRF

FRF

Effect on ROV

Effect on AET

Effect on ROV

Effect on AET

μ0X

Increases with μ0X

Longer with μ0X

Increases with μ0X

Longer with μ0X

σX

Increases with σX for δ < 13 % and decreases with σX for δ > 13 %

Longer with σX for δ < 13 %, and shorter with σX for δ > 13 %

Increases with σX

Longer with σX

μ0A

Decreases then flat when μ0A > 0

Longer then flat when μ0A > 0

Decreases then become zero when μ0A > 0

Shorter then become zero when μ0A > 0

σA

Increases with σA

Longer with σA

Increases with σA

Longer with σA

c

Decreases then flat when c > 0.85

Longer then flat when c > 0.85

Decreases then become zero when c > 0.85

Shorter then become zero when c > 0.85

δ

Increases with δ

Longer with δ

Increases with δ

Longer with δ