Modeling Stochastic Innovation Races

Hans W. Gottinger ()
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Hans W. Gottinger: University of Maastricht and CSEF, University of Salerno

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We consider a firm moving towards a stochastic final destination, to be chosen from a discrete set after a decision period. The decision period itself may be deterministic or stochastic. We assume the firm can move at variable innovation (R&D) speed associated with a monotone nondecreasing variable cost, and it can also stop and move anywhere. There is a fixed cost per time unit "carried" by the firm as well, associated with keeping at the knowledge (technology) frontier. We investigate various types of the firm's optimal trajectory in the R&D race during the decision period.

Keywords: Innovation; Race; Competition; Strategy; Industrial Economics (search for similar items in EconPapers)
Date: 2001-01-01
New Economics Papers: this item is included in nep-tid
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