@techreport{76d14f326ec441a184e17c5133fa0564,
title = "Optimal R&D Investments of the Firm",
abstract = "This paper examines irreversible decisions on innovative activities where it takes time to complete an R&D project. The totala mountof R&D investments that the firm needs to undertake in order to obtain the breakthrough in the innovation process is uncertain. R&D investments are limited by the restriction that they must be self-financed. It is shown that R&D investmentsar e morev aluable when the level of uncertainty is large. Especially, it is very attractive to undertake R&D investments if a project faces many uncertainties during its ea rly phases. Furthermore we study how R&D behavior is inuenced by different levels of the discount rate and the financing limit. Moreover, the effects of R&D subsidies, spillover benefirts and a payoff that decreases over time are analyzed.",
keywords = "research and development, investment, uncertainty",
author = "P.M. Kort",
note = "Pagination: 26",
year = "1996",
language = "English",
volume = "1996-47",
series = "CentER Discussion Paper",
publisher = "Operations research",
type = "WorkingPaper",
institution = "Operations research",
}