Machine replacement, Network Externalities and Investment Cycles

Preprint OPEN
Juan Ruiz;
(2003)
  • Subject: Machine replacement, network externalities, investment cycles, delay.
    • jel: jel:E32 | jel:E22 | jel:D92

This paper presents a model where agents decide on the timing of replacement of ageing machines. The optimal replacement policy for an agent is influenced by other agents' decisions because the productivity of a particular vintage displays network externalities that set... View more
  • References (2)

    17Recall that tˆN is defined by the maximum value of t satisfying F (0, N) ≤ F (t, N). This is the oldest age of the machine that gives an agent at least the same payoff as a new machine. Note that for N < nl, tˆN = 0.

    18See for example Krugman(1991) and Matsuyama(1991), and closer to this model, the results in Cooper and Haltiwanger (1992) and Shleifer(1986)

  • Metrics
Share - Bookmark