In the financial field, there is a widely spread out idea that the use of the real options method in the valuation of a project or management of a business results in larger values than those obtained by orthodox techniques (Net Present Value). The purpose of this paper is to demystify such concept, demonstrating that when the effect of competition is correctly taken into account, the use of orthodox techniques of valuation or management can lead the companies' managers to take strategic decisions capable to generate larger profits than those that would be generated through the use of real options. This is demonstrated through the modeling of a duopolistic market subjected to uncertainties, being calculated and compared the expected profit for one of the companies according to three concepts of management: orthodox method; exclusive real options and common real options. The results of the model show that depending on the type of available real option, a situation of prisoner's dilemma can occur, in this case the management through real options being inefficient when compared with the orthodox method.
real options; games; valuation; strategy; duopoly
