Never-ending Search for Innovation

Jean-Michel Benkert and Igor Letina

Papers from arXiv.org

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.

Date: 2024-12, Revised 2025-02
New Economics Papers: this item is included in nep-cse, nep-ino, nep-mic, nep-ppm and nep-sbm
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