1. On Optimal Leader's Investments Strategy in a Cyclic Model of Innovation Race with Random Inventions Times.
- Author
-
Aseev, Sergey M. and Katsumoto, Masakazu
- Subjects
INVESTMENT policy ,NUMERICAL calculations ,INVENTIONS ,STOCHASTIC processes ,TIME perspective - Abstract
In this paper, we develop a new dynamic model of optimal investments in R&D and manufacturing for a technological leader competing with a large number of identical followers on the market of a technological product. The model is formulated in the form of the infinite time horizon stochastic optimization problem. The evolution of new generations of the product is treated as a Poisson-type cyclic stochastic process. The technology spillovers effect acts as a driving force of technological change. We show that the original probabilistic problem that the leader is faced with can be reduced to a deterministic one. This result makes it possible to perform analytical studies and numerical calculations. Numerical simulations and economic interpretations are presented as well. [ABSTRACT FROM AUTHOR]
- Published
- 2020
- Full Text
- View/download PDF