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| Author: | Cayley, F. Lippman, S. |
| Title: | Myopia and R&D/production complementarities |
| Journal: | Economic Theory
1994 : VOL. 4:3, p. 437-451 |
| Index terms: | R&D PRODUCTION ECONOMIC THEORY |
| Language: | eng |
| Abstract: | The simple economics of a firm's decision to begin an in-house program of R&D is more complicated than appears at first blush. The authors utilize a multi-period search theoretic model to consider this decision when the firm's state of technological progress is fully described by a real-valued variable. By investing in R&D at the beginning of a period, the firm obtains an innovation whose value is revealed at the end of the period. Whereas there is a fixed cost of implementing a new innovation, the benefits include not only an increase in the flow rate of profits but also an increase in the efficiency of the firm's R&D efforts s |
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