Learning and Technology Adoptions
AbstractThis essay studies the optimal timing for a firm to adopt a new process innovation in the presence of learning. A policy that has been implemented by governments throughout the world to reduce the cost level of infant industries with positive externalities, is to either subsidize the research of these technologies or their distribution. This model demonstrates how government interventions can affect the optimal timing for adoption of a new technology. Furthermore this essay makes predictions on how the effects change, when the total quantity that can be produced is fixed; the installations of wind powered energy plants exemplify this point. Depending on whether producer rents, consumer rents or early implementation are more important to the government, the model offers the appropriate tools to attain its objective.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 11321.
Date of creation: 31 Jan 2010
Date of revision:
Learning; Process Innovation; Optimal Control; Infant industry;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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