Optimal research and development expenditures under an incremental tax incentive scheme

DOI10.1016/0167-6377(85)90038-0MaRDI QIDQ1058975zbMATH OpenOpenAlexFDO

Authors Pierre L'Ecuyer, A. Hollander, Alain Haurie

Publication date 1985

Published in Operations Research Letters (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/0167-6377(85)90038-0

zbMATH Keywords

epsilon-optimal policyfinanceincremental tax incentiveinvestmentone-period-memory piecewise linear incentive schemeoptimal R and D spendingprofit maximizing firm

Mathematics Subject Classification ID

Operations research and management science (90B99) Dynamic programming (90C39) Applications of mathematical programming (90C90) Production theory, theory of the firm (91B38)

Review text

The effect of an incremental tax incentive on optimal R and D spending of a profit maximizing firm is investigated. A dynamic programming approach permits the complete characterization of an optimal policy for a one- period-memory piecewise linear incentive scheme, and efficient computation of an \(\epsilon\)-optimal policy in the more general case.

Recommendations

• Optimal taxation and R\&D policies
• Optimal management of an R\&D budget
• Dynamically optimal R\&D subsidization
• Optimal R&D programs in a random environment
• Expenditure patterns for risky R and D projects

Cites work

• A stochastic control approach to group preventive replacement in a multicomponent system
• Discounted Dynamic Programming
• scientific article; zbMATH DE number 3298490 (Why is no real title available?)
• scientific article; zbMATH DE number 3320878 (Why is no real title available?)
• Stochastic optimal control. The discrete time case

Cited in

(7)

• scientific article; zbMATH DE number 1462919 (Why is no real title available?)
• Optimal taxation and R\&D policies
• Efficient purchaser incentive when dealing with suppliers implementing continuous improvement plans
• Research on incentive mechanism of R\&D in defense procurement based on cost-reimbursement
• Optimal management of an R\&D budget
• Limit cycles in dynamic economic systems
• Cost of capital for incentives on capacity expansion investments

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