Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/37222
Authors: 
Klepper, Mathis
Year of Publication: 
2010
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Dynamic Models of Investment D8-V1
Abstract: 
This paper investigates technology adoption of a single firm in a continuous time model with an infinite planning horizon and an infinite number of investment opportunities. Technological progress is exogenous and modeled either by a poisson process or a geometric poisson process. For both processes, we characterize the optimal investment strategies. In the case of a poisson process we show that a cyclical investment pattern, that is adopting every m-th technology is optimal. If technological progress is modeled as a geometric poisson process, we argue that the number of technologies not adopted between two adoptions decreases with time, until finally each new technology will be adopted.
Subjects: 
Technology adoption
Technological uncertainty
Investment irreversebility
Optimal timing
JEL: 
D81
D92
O33
Document Type: 
Conference Paper

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