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'Reverse Hysteresis': R&D Investment with Stochastic Innovation

Weeds, Helen (1999) 'Reverse Hysteresis': R&D Investment with Stochastic Innovation. Working Paper. The Warwick Economics Research Paper Series (TWERPS) 578.

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Abstract

We consider optimal investment behavior for a firm facing both technological and economic uncertainty, in the context of a research project with unpredictable outcomes. The optimal investment strategy, in the form of a pair of trigger points for investment and abandonment, is derived. As in Dixit (1989), the investment trigger exceeds the Marshallian investment point.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Research And Development ; Investments ; Behaviour
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 18 Jul 2012 00:02
Last Modified: 18 Jul 2012 00:02
URI: http://repository.essex.ac.uk/id/eprint/3054

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