Research in energy conversion technologies: Policy instruments and uncertainty
AbstractIn this paper, the effects of uncertainty and of various policy instruments on the lengthand attractiveness of private research projects are studied. Research expenditure can beregained from quasi-rents that are earned by exploiting patents on the fruits of research.The accumulation of knowledge is modeled as a Poisson process. Within the context ofthe model, we show that firms shorten the duration of research projects when uncertaintyin knowledge accumulation increases or when, for example, the validity of patents isprolonged. The underlying mechanisms are due to Jensen™s Inequality and a real-optioneffect. Furthermore, we develop a smooth pasting condition for a class of Poissonprocesses.
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Bibliographic InfoPaper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 005.
Date of creation: 2002
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economics of technology ;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-02-24 (All new papers)
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