Policy Uncertainty and Technology Adoption

被引:3
作者
Dehghani, Mohammad H. [1 ]
机构
[1] Univ Tehran, Fac Econ, Tehran, Iran
来源
B E JOURNAL OF ECONOMIC ANALYSIS & POLICY | 2014年 / 14卷 / 04期
关键词
real options; technology adoption; policy uncertainty; clean technology; regime switching; REAL OPTIONS MODEL; INVESTMENT;
D O I
10.1515/bejeap-2013-0167
中图分类号
F [经济];
学科分类号
02 ;
摘要
This paper considers technology adoption under both technological and subsidy uncertainties. Uncertainty in subsidies for green technologies is considered as an example. Technological progress is exogenous and modeled as a jump process with a drift. The analytical solution is presented for cases when there is no subsidy uncertainty and when the subsidy changes once. The case when the subsidy follows a time invariant Markov process is analyzed numerically. The results show that improving the innovation process raises the investment thresholds. When technological jumps are small or rare, this improvement reduces the expected time before technology adoption. However, when technological jumps are large or abundant, this improvement may raise this expected time.
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页码:1405 / 1430
页数:26
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