Genetic Algorithm and Black-Scholes Option Pricing Model in Patent Value Evaluation

Abstract

In order to avoid the traditional valuation method from underestimating the value of risk assets, this paper puts forward the similarity between option and patent, and puts forward the improved form of Black-Scholes option valuation model applied to patent value through reasonable assumption of patent. In order to overcome the shortcomings of traditional algorithms, such as difficulty in solving nonlinear functions effectively, and difficulty in analyzing the effects of risk coefficient and variance of company assets on patent value, a genetic algorithm solving method for this problem is proposed. In order to effectively verify the function of this method, this paper simplifies it with an example. This method is relatively new. A practical example shows that the proposed model can be solved accurately based on genetic algorithm, and can also effectively judge the effect of the above two variables on patent value.