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Network economics and optimal replacement of age-structured IT capital

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  • Yu. Yatsenko
  • N. Hritonenko

Abstract

The constructed hierarchical optimization model of vintage capital replacement takes into account network effects and the age-dependent technological structure of capital equipment. It involves the control of a network coalition choice, endogenous investments, capital structure, and capital lifetime. The qualitative analysis of the model shows how the lifetime and financial structure of the IT capital depends on technological change. These results are relevant for strategic management on a firm level. Provided numeric examples simulate the optimal lifetime of personal computers. Copyright Springer-Verlag 2007

Suggested Citation

  • Yu. Yatsenko & N. Hritonenko, 2007. "Network economics and optimal replacement of age-structured IT capital," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 65(3), pages 483-497, June.
    • Handle: RePEc:spr:mathme:v:65:y:2007:i:3:p:483-497
    DOI: 10.1007/s00186-006-0129-6
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    Cited by:

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