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

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  • 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
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    References listed on IDEAS

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    Cited by:

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    2. 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.

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