Never-ending Search for Innovation

Igor Letina Jean-Michel Benkert

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: We provide a model of investment in innovation that is dynamic, features multiple heterogeneous research projects of which only one potentially leads to success, and in each period, the researcher chooses the set of projects to invest in. We show that if a search for innovation starts, it optimally does not end until the innovation is found—which will be never with a strictly positive probability.

Keywords: Innovation; Optimal Search; Infinite Horizon (search for similar items in EconPapers)
JEL-codes: D83 O31 (search for similar items in EconPapers)
Date: 2024-12
New Economics Papers: this item is included in nep-cse, nep-ino, nep-mac, nep-mic, nep-ppm and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp2410

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