“Good management is not just about making the right decisions. It is about making the right decision at the right time.”
THALES OF MILETUS, a Greek philosopher, read his tealeaves. He divined that the olive harvest would be bountiful. Next he bought the right (but not the obligation) to rent olive presses at normal rates come harvest time. The forecast was correct. Olive growers were desperate for pressing capacity. Thales made a fortune by subletting the olive presses for an extortionate sum, demonstrating just how good an investment an “option” can be.1
This chapter explores the role of options.2 Options can be a useful tool in preventing escalation and entrapment, with options theory working ...