Research in energy conversion technologies: Policy instruments and uncertainty
Straathof, Bas and van Zon, Adriaan (2002). Research in energy conversion technologies: Policy instruments and uncertainty. UNU-MERIT Research Memoranda. UNU-MERIT.
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Sub-type Working paper Author Straathof, Bas
van Zon, AdriaanTitle Research in energy conversion technologies: Policy instruments and uncertainty Series Title UNU-MERIT Research Memoranda Volume/Issue No. 3 Publication Date 2002 Place of Publication Maastricht, NL Publisher UNU-MERIT Pages 13 Language eng Abstract In this paper, the effects of uncertainty and of various policy instruments on the length and attractiveness of private research projects are studied. Research expenditure can be regained from quasi-rents that are earned by exploiting patents on the fruits of research. The accumulation of knowledge is modeled as a Poisson process. Within the context of the model, we show that firms shorten the duration of research projects when uncertainty in knowledge accumulation increases or when, for example, the validity of patents is prolonged. The underlying mechanisms are due to Jensen___s Inequality and a real-option effect. Furthermore, we develop a smooth pasting condition for a class of Poisson processes. Copyright Holder UNU-MERIT Copyright Year 2002 Copyright type All rights reserved -
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