On optimal leader's investments strategy in a cyclic model of innovation race with random inventions times

DOI10.3390/G11040052MaRDI QIDQ2223664zbMATH OpenOpenAlexFDO

Authors S. M. Aseev, Masakazu Katsumoto

Publication date 1 February 2021

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g11040052

zbMATH Keywords

dynamic optimizationimitationoptimal allocation of resourcesR\&Dstochastic innovation racetechnology spillovers

Mathematics Subject Classification ID

Resource and cost allocation (including fair division, apportionment, etc.) (91B32) Production theory, theory of the firm (91B38) Stochastic models in economics (91B70)

Review text

Summary: In this paper, we develop a new dynamic model of optimal investments in R\&D and manufacturing for a technological leader competing with a large number of identical followers on the market of a technological product. The model is formulated in the form of the infinite time horizon stochastic optimization problem. The evolution of new generations of the product is treated as a Poisson-type cyclic stochastic process. The technology spillovers effect acts as a driving force of technological change. We show that the original probabilistic problem that the leader is faced with can be reduced to a deterministic one. This result makes it possible to perform analytical studies and numerical calculations. Numerical simulations and economic interpretations are presented as well.

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Cites work

• A Model of Growth Through Creative Destruction
• scientific article; zbMATH DE number 51863 (Why is no real title available?)
• Mathematical optimization and economic theory
• New Product Development: The Performance and Time-to-Market Tradeoff
• On the Diffusion of New Technology: A Game Theoretic Approach
• Understanding perpetual R\&D races

Cited in

(2)

• Optimal control theory: introduction to the special issue
• A dynamic model of optimal investment in research and development with international knowledge spillovers

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