Dr. Yuri Yatsenko, professor of business and program coordinator for International Business in the Archie W. Dunham College of Business, along with co-authors from both Japan and the US, published the paper “Optimal control of investments in old and new capital under improving technology” in the high-ranked Journal of Optimization Theory and Applications (Springer). An important open issue of innovation economics is why firms invest into old less efficient technologies while newer and better ones are freely available on market. This paper offers a new explanation of this phenomenon and establishes optimal investment policies for capital units of different ages. The analytic outcomes deliver new insight into investment policies under technological change. Access the paper here.
The paper was initiated when Dr. Yatsenko visited Kanazawa University by the invitation of Dr. Kato in May 2015.