Network economics and optimal replacement of age-structured IT capital

Yuri Yatsenko and N. Hritonenko ()

Mathematical Methods of Operations Research, 2007, vol. 65, issue 3, 483-497

Abstract: The constructed hierarchical optimization model of vintage capital replacement takes into account network effects and the age-dependent technological structure of capital equipment. It involves the control of a network coalition choice, endogenous investments, capital structure, and capital lifetime. The qualitative analysis of the model shows how the lifetime and financial structure of the IT capital depends on technological change. These results are relevant for strategic management on a firm level. Provided numeric examples simulate the optimal lifetime of personal computers. Copyright Springer-Verlag 2007

Keywords: Optimization; Integral equations; Vintage capital models; Equipment lifetime; Network economics; IT (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1007/s00186-006-0129-6

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