IDEAS home Printed from https://ideas.repec.org/a/taf/defpea/v17y2006i3p201-222.html
   My bibliography  Save this article

A Brave Leap Or A Gradual Climb? The Dynamics Of Investment In R&D Of Integrative Technologies

Author

Listed:
  • Oren Setter
  • Asher Tishler

Abstract

Our paper explores the optimal investment in integrative technologies (such as command and control systems), which are a major part of defense R&D at the beginning of the 21st century. Employing a dynamic optimization framework, we find that under linear development costs, it may be optimal or nearly optimal to build military forces using a myopic, short-termed, approach. In such cases, it would be optimal to transform an armed force into a network-centric environment within just a few years. When development costs are convex however, early investment in technological infrastructure is required, extending the transformation period over more than a decade.

Suggested Citation

  • Oren Setter & Asher Tishler, 2006. "A Brave Leap Or A Gradual Climb? The Dynamics Of Investment In R&D Of Integrative Technologies," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 201-222.
    • Handle: RePEc:taf:defpea:v:17:y:2006:i:3:p:201-222
    DOI: 10.1080/10242690600645100
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10242690600645100
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10242690600645100?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nissan Levin & Asher Tishler & Jacob Zahavi, 1983. "Time Step vs. Dynamic Optimization of Generation-Capacity-Expansion Programs of Power Systems," Operations Research, INFORMS, vol. 31(5), pages 891-914, October.
    2. Gene M. Grossman & Carl Shapiro, 1986. "Optimal Dynamic R&D Programs," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 581-593, Winter.
    3. Christoph H. Loch & Stylianos Kavadias, 2002. "Dynamic Portfolio Selection of NPD Programs Using Marginal Returns," Management Science, INFORMS, vol. 48(10), pages 1227-1241, October.
    4. Manuel Trajtenberg, 2006. "Defense R&D In The Anti-Terrorist Era," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 177-199.
    5. Goolsbee, Austan, 1998. "Does Government R&D Policy Mainly Benefit Scientists and Engineers?," American Economic Review, American Economic Association, vol. 88(2), pages 298-302, May.
    6. Dixit, Avinash K., 1990. "Optimization in Economic Theory," OUP Catalogue, Oxford University Press, edition 2, number 9780198772101, Decembrie.
    7. F. M. Scherer, 1967. "Research and Development Resource Allocation Under Rivalry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 81(3), pages 359-394.
    8. Manuel Trajtenberg, 2004. "Crafting Defense R&D Policy in the Anti-Terrorist Era," NBER Chapters, in: Innovation Policy and the Economy, Volume 4, pages 1-34, National Bureau of Economic Research, Inc.
    9. Day, Richard H & Morley, Samuel A & Smith, Kenneth R, 1974. "Myopic Optimizing and Rules of Thumb in a Micro-Model of Industrial Growth," American Economic Review, American Economic Association, vol. 64(1), pages 11-23, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Renaud Bellais & Daniel Fiott, 2017. "The European defense market: Disruptive innovation and market destabilization," Economics of Peace and Security Journal, EPS Publishing, vol. 12(1), pages 38-45, April.
    2. Renaud Bellais, 2013. "Technology and the defense industry: real threats, bad habits, or new (market) opportunities?," Post-Print hal-00947395, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peter M. Kort & Ruslan Lukach & Joseph Plasmans, 2007. "Strategic R&D with Knowledge Spillovers and Endogenous Time to Complete," CESifo Working Paper Series 2027, CESifo.
    2. Manuel Trajtenberg, 2006. "Defense R&D In The Anti-Terrorist Era," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(3), pages 177-199.
    3. David, Paul A. & Hall, Bronwyn H., 2000. "Heart of darkness: modeling public-private funding interactions inside the R&D black box," Research Policy, Elsevier, vol. 29(9), pages 1165-1183, December.
    4. Ufuk Akcigit & Douglas Hanley & Stefanie Stantcheva, 2022. "Optimal Taxation and R&D Policies," Econometrica, Econometric Society, vol. 90(2), pages 645-684, March.
    5. Sergio Afcha & Jose García-Quevedo, 2016. "The impact of R&D subsidies on R&D employment composition," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(6), pages 955-975.
    6. Dominique Guellec & Bruno Van Pottelsberghe De La Potterie, 2003. "The impact of public R&D expenditure on business R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(3), pages 225-243.
    7. Berna Tektaş & Hasan Hüseyin Turan & Nihat Kasap & Ferhan Çebi & Dursun Delen, 2022. "A Fuzzy Prescriptive Analytics Approach to Power Generation Capacity Planning," Energies, MDPI, vol. 15(9), pages 1-26, April.
    8. Albert N. Link & John T. Scott, 2018. "Propensity to Patent and Firm Size for Small R&D-Intensive Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(4), pages 561-587, June.
    9. Dequiedt, V. & Versaevel, B., 2004. "Patent pools and the dynamic incentives to R&D," Working Papers 200412, Grenoble Applied Economics Laboratory (GAEL).
    10. Alex Bell & Raj Chetty & Xavier Jaravel & Neviana Petkova & John Van Reenen, 2019. "Who Becomes an Inventor in America? The Importance of Exposure to Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 647-713.
    11. Liu, Jingjing & Zhao, Min & Wang, Yanbo, 2020. "Impacts of government subsidies and environmental regulations on green process innovation: A nonlinear approach," Technology in Society, Elsevier, vol. 63(C).
    12. Jonathan B. Berk & Richard C. Green & Vasant Naik, 1998. "Valuation and Return Dynamics of New Ventures," NBER Working Papers 6745, National Bureau of Economic Research, Inc.
    13. Bar-Ilan, Avner & Strange, William C., 1998. "A model of sequential investment," Journal of Economic Dynamics and Control, Elsevier, vol. 22(3), pages 437-463, March.
    14. Scherer, F.M., 2010. "Pharmaceutical Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 539-574, Elsevier.
    15. Fabien Candau, 2011. "Heterogeneous Immigration, Segregation and Trade," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 73-86, February.
    16. Blair Fix, 2019. "The Aggregation Problem: Implications for Ecological and Biophysical Economics," Biophysical Economics and Resource Quality, Springer, vol. 4(1), pages 1-15, March.
    17. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2000. "Technological Change and the Environment," Working Paper Series rwp00-002, Harvard University, John F. Kennedy School of Government.
    18. John Van Reenen, 2022. "Innovation and Human Capital Policy," NBER Chapters, in: Innovation and Public Policy, pages 61-83, National Bureau of Economic Research, Inc.
    19. Daniel Hollas & Kenneth Macleod & Stanley Stansell, 2002. "A data envelopment analysis of gas utilities' efficiency," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 26(2), pages 123-137, June.
    20. Joel Peress & jim goldman, 2016. "Firm Innovation and Financial Analysis: How Do They Interact?," 2016 Meeting Papers 531, Society for Economic Dynamics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:defpea:v:17:y:2006:i:3:p:201-222. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GDPE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.