On The Investment Pricing Of Technology Innovation Based On Consumer-utility

With the gradually opening of China’s options market, researchers have been made more researches on novel options. With the explosive development of knowledge, especially, technological innovation has become one of the dynamic process of ‘creation and ruin’, which its uncertainty make it difficult to observe changes for traditional investment decision to get better feedback. Considering factors in the incomplete market environment, applying consumer utility indifference pricing principle to make the price for original assets of non‐tradable entrepreneur technological innovation investment. This paper will make the research on three kinds of capitals, including investable capital, including bond, liquidity risk, illiquidity risk which has certain trading loss, and utilizing utility function CARA to establish the model of maximizing investment utility and to construct the optimal objective function which could satisfy Bellman equation so that would receive a differential equation on satisfying the implied value of technical innovation investment opportunities. This paper will also compare the result with bond capital and two types of investment and liquidity risk assets and analyze how the technological innovation investment impact the illiquid assets and its trading losses. In addition, this paper will extend its discussion on regulatory issues which result from technological innovation, making an example with Internet banking field nowadays. The technology innovation on computer provides the new concepts to financial concepts and methods so that it can break the traditional financial model, opening financial markets and also put forward the new demands and challenges to constraints on regulatory issues. By analyzing two aspects about stability and efficiency in Internet financial model indicators, applying main component analysis method and fuzzy rating method, to obtain regulatory trends chart and each index contribution share table, finally, this paper gets a conclusion underlying the theory comparative analysis: the stability of supervision on Internet financial will be more important and greater than its efficiency. This paper will also provide some suggestions on supervision effectiveness of Chinese Internet financial markets which is based on the network pioneer countries such as the United States and its stability and effectiveness of regulatory measures, as a good example and reference to our supervision and regulatory of technical innovation.