IDEAS home Printed from https://ideas.repec.org/p/tiu/tiutis/54873dcf-e1ea-442a-8c1f-be2e6c5f5b2c.html

Product innovation with lumpy investment

Author

Listed:
  • Chahim, M.

    (Tilburg University, School of Economics and Management)

  • Grass, D.
  • Hartl, R.F.
  • Kort, Peter M.

    (Tilburg University, School of Economics and Management)

Abstract

The paper provides a framework that enables us to analyze the important topic of capital accumulation under technological progress. We describe an algorithm to solve Impulse Control problems, based on a (multipoint) boundary value problem approach. Investment takes place in lumps and we determine the optimal timing of technology adoptions as well as the size of the corresponding investments. Our numerical approach led to some guidelines for new technology investments. First, we find that investments are larger and occur in a later stadium when more of the old capital stock needs to be scrapped. Moreover, we obtain that the size of the firm’s investments increase when the technology produces more profitable products. We see that the firm in the beginning of the planning period adopts new technologies faster as time proceeds, but later on the opposite happens. Furthermore, we find that the firm does not invest such that marginal profit is zero, but instead marginal profit is negative.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This a
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Chahim, M. & Grass, D. & Hartl, R.F. & Kort, Peter M., 2017. "Product innovation with lumpy investment," Other publications TiSEM 54873dcf-e1ea-442a-8c1f-b, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:54873dcf-e1ea-442a-8c1f-be2e6c5f5b2c
    as

    Download full text from publisher

    File URL: https://repository.tilburguniversity.edu/bitstreams/1a8b5adf-d5c3-41a2-a602-b9ae8ff3debd/download
    Download Restriction: no
    ---><---

    Other versions of this item:

    • M. Chahim & D. Grass & R. F. Hartl & P. M. Kort, 2017. "Product innovation with lumpy investment," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 25(1), pages 159-182, March.

    Citations

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


    Cited by:

    1. Herbert Dawid & Karl F. Doerner & Gustav Feichtinger & Margaretha Gansterer & Peter M. Kort & Andrea Seidl, 2024. "Advances in applied optimal control and combinatorial optimization: special isssue in honor of Richard F. Hartl," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 32(2), pages 177-182, June.
    2. Sadana, Utsav & Reddy, Puduru Viswanadha & Zaccour, Georges, 2021. "Nash equilibria in nonzero-sum differential games with impulse control," European Journal of Operational Research, Elsevier, vol. 295(2), pages 792-805.

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:tiu:tiutis:54873dcf-e1ea-442a-8c1f-be2e6c5f5b2c. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Richard Broekman (email available below). General contact details of provider: https://www.tilburguniversity.edu/about/schools/economics-and-management/ .

    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.