Never-ending Search for Innovation

Jean-Michel Benkert and Igor Letina

No 19732, CEPR Discussion Papers from Centre for Economic Policy Research

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 (search for similar items in EconPapers)
JEL-codes: D83 O31 (search for similar items in EconPapers)
Date: 2024-12
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