2022/12/19 by Roger Knecktys, Henrik M. Bette, Knecktys, Roger +5
Business, Management and Accounting · Engineering · #Digital Transformation in Industry #Economic and Technological Systems Analysis #FOS: Economics and business #Flexible and Reconfigurable Manufacturing Systems #Mathematical Finance (q-fin.MF)
paper · pdf · doi:10.48550/arxiv.2212.09585
openalex publication_date 2022/12/19 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Technology trends as digitalization and Industry 4.0 initiate a growing demand for new business models. Most of this models requires a fundamental shift of operational and financial risks between seller and buyer. A key question is therefore how to include additional risk pricing and hedging. In this paper we propose a new approach for a risk theory of innovative performance based business models as "Pay-for-Performance" or "Product as a Service". A new model and calculation method for determination the risk premium is presented. It contains beside financial price fluctuations also operational failure behaviour of products. We apply the model for a typical industrial application and simulate the pricing dependency for different cost distributions.