Chapter 5 Strategic R&D with Uncertainty

Automakers are now developing alternatives to internal combustion engines (ICE), including hydrogen fuel cells and ICE-electric hybrids. Adoption dynamics for alternative vehicles are complex due to the size and importance of the auto industry and vehicle installed base. Diffusion of alternative vehicles is both enabled and constrained by powerful positive feedbacks arising from scale and scope economies, R&D, learning by doing, driver experience, word of mouth, and complementary resources such as fueling infrastructure. We describe a dynamic model of the diffusion of and competition among alternative fuel vehicles, including coevolution of the fleet, technology, consumer behavior, and complementary resources. Here we focus on the generation of consumer awareness of alternatives through feedback from consumers' experience, word of mouth and marketing, with a reduced form treatment of network effects and other positive feedbacks (which we treat in other papers). We demonstrate the existence of a critical threshold for sustained adoption of alternative technologies, and show how the threshold depends on economic and behavioral parameters. We show that word of mouth from those not driving an alternative vehicle is important in stimulating diffusion. Expanding the model boundary to include learning, technological spillovers and spatial coevolution of fueling infrastructure adds additional feedbacks that condition the diffusion of alternative vehicles. Results show scenarios for successful diffusion of alternative vehicles, but also suggest that marketing programs and subsidies for alternatives must remain in place for long periods for diffusion to become self-sustaining.

Automakers are now developing alternatives to internal combustion engines (ICE), including hydrogen fuel cells and ICE-electric hybrids. Adoption dynamics for alternative vehicles are complex, owing to the size and importance of the auto industry and vehicle installed base. Diffusion of alternative vehicles is both enabled and constrained by powerful positive feedbacks arising from scale and scope economies, research and development, learning by doing, driver experience, word of mouth, and complementary resources such as fueling infrastructure. We describe a dynamic model of the diffusion of and competition among alternative fuel vehicles, including coevolution of the fleet technology, behavior, and complementary resources. Here we focus on the generation of consumer awareness of alternatives through feedback from consumers' experience, word of mouth, and marketing, with a reduced-form treatment of network effects and other positive feedbacks (which we treat in other papers). We demonstrate the existence of a critical threshold for sustained adoption of alternative technologies, and show how the threshold depends on economic and behavioral parameters. We show that word of mouth from those not driving an alternative vehicle is important in stimulating diffusion. Expanding the model boundary to include learning, technological spillovers, and spatial coevolution of fueling infrastructure adds additional feedbacks that condition the diffusion of alternative vehicles. Results show scenarios for successful diffusion of alternative vehicles, but also suggest that marketing programs and subsidies for alternatives must remain in place for long periods for diffusion to become self-sustaining.

Effects of technology spillover on CO2 emissions in China: A threshold analysis

Optimal licensing of uncertain patents in a differentiated Stackelberg duopolistic competition market

This study uses China's provincial panel data for 2003–2016 to estimate the turning point of technology spillovers promoting economic growth in the coastal and inland areas. The results show that the turning point in coastal areas is significantly higher than that in inland areas. However, improved absorptive capacity as a result of regional disparity increases the threshold of technology spillovers from promotion to suppression in inland areas but decreases it in coastal areas. Then, this study further tests the threshold characteristics of absorptive capacity factors influencing international technology spillovers using a double-threshold regression model and estimates the threshold values of both forward and reverse spillovers from the viewpoint of knowledge context, economic development, opening degree and human resources infrastructure. In conclusion, the effect of absorptive capacity factors on international spillovers is nonlinear, that is, when absorptive capacity factors are between the two threshold values, technology spillovers are maximised.

This paper examines the relationship between market integration and product diversification in a Chamberlinian model of monopolistic competition. In the first version of the model, production of the firm is organised in activities producing either one or two horizontally differentiated product-variants. The cost functions show both scale and scope economies. Market integration is illustrated by an increase in the market size. For increasing market size, each firm shifts from producing two variants to producing one variant only at a certain threshold value of market size. Passing this threshold value the firm size measured by total output changes discontinuously leaving the effect on firm size ambiguous. For specific specification of the perceived demand of the individual firm hysteresis of the industrial structure may appear in the sense that the threshold value of the market size for shifting from two to one variant production exceeds that of the threshold value of market size of shifting from one to two variants. In the last part of the paper, the model is generalised to a continuum of variants and it is shown that an increase of the market size reduces the number of variants produced by each firm, whereas the hysteresis phenomenon disappears.

We investigate the impacts of local-demand quantity and quality on firms’ position in global value chains, using the microdata of Chinese enterprises from 2000 to 2014. The analysis finds that both the quantity and quality of local demand can significantly promote the position of enterprises in global value chains. The quantity of local demand affects firms’ upgrading in global value chains through economies of scale, economies of scope, and the technology spill-over effect. Enterprises with the advantages of differentiation, localization, internalization, and higher capital intensity are more capable of improving their positions in global value chains through the quality of local demand. Comparing across different stages, types, and standardized regression coefficients, we find that quality rather than the quantity of local demand is more conducive to firms’ upgrading in global value chains. Furthermore, the quantity and quality of local demand have a mutually reinforcing and complementary relationship in promoting firms’ upgrading in global value chains.

Using provincial panel data in the period of 2000-2018, we establish dynamic panel data model to analyze the influence of financial development on FDI (Foreign Direct Investment) technology spillover and regional economic growth. The result indicates that the development of financial market obviously promotes positive technical progress and economic growth. With financial development, FDI technology spillover changes in the form of reversed U curve, there are two critical values, one number is from negative to positive, the other is from positive to negative. the level of our country's financial development just surpasses critical value from negative to positive, and the most of provinces is under the critical value, such as Guizhou, is positive, but Beijing, Shanghai and Zhejiang's financial development surpasses critical value from positive to negative, and these provinces will confront the risk of excessive financial deepen and industry hollow.

Two experiments were conducted to evaluate the potential to use leaf chlorophyll index (LCI), measured using a Minolta SPAD-502 meter, for making fertilizer nitrogen (N) recommendations for silage corn in a high N fertility environment. In Experiment 1, treatments were 0, 40, 80, 120, 160, and 200 kg N ha− 1 as NH4NO3 broadcast at corn emergence. At the six-leaf stage, soil inorganic N to 90 cm depth, total Kjeldahl N concentration of the fifth leaf, sixth leaf, and the above-ground portion of the plant, and LCI of the fifth and sixth leaves, were determined. In Experiment 2, LCI and LCIR (ratio of LCI to LCI from a reference plot receiving 200 kg N ha− 1 at corn emergence) were measured at approximately the six-leaf stage in 87 trials 1994–1996. Treatments consisted of different fertilizer N rates applied at sidedress, and corn yield and pre-sidedress soil nitrate test (PSNT) values were determined. In Experiment 1, nitrogen concentration of the above-ground plant increased with increasing soil inorganic N content up to about 350 kg N ha− 1, and LCI generally increased linearly with leaf total N concentration. However, the relationship between LCI and leaf N concentration varied among years, and the relationship between leaf total N concentration and above-ground plant total N concentration was inconsistent. In Experiment 2, above-ground plant total N concentration was a poor predictor of soil inorganic N supply and corn relative yield when measured over a number of trials. Leaf chlorophyll index at the six-leaf stage therefore has significant limitations as an indicator of corn N status or soil inorganic N supply. Despite these limitations, LCI had a 68% success rate in identifying fields which were responsive and unresponsive to sidedress N using a critical LCI value of 43.7 SPAD units. This success rate is similar to that obtained with the PSNT. However, LCI cannot be used to recommend rates of fertilizer N for LCI values below the critical value. Use of LCIR was of little benefit compared to use of LCI. Leaf chlorophyll index may be most suitable as a preliminary screening tool, used on-site to rapidly identify fields which do not require additional sidedress N, whereas other fields would require a PSNT soil sample to be taken.

In the literature of higher education cost function study, enough knowledge is created in the area of economy scale in the context of developed countries but the knowledge of input demand is lacking. On the other hand, empirical knowledge in the context of developing countries is very meagre. The paper fills up the knowledge gap, estimating a quadratic cost frontier for the public universities in Bangladesh and thereby analysing economies of scale, economies of scope and input demand choice. The study is based on the panel data for Year 2002–2007. Findings show that there are economies of scale up to 350% of the mean output level in the public university, and the critical value of cost-minimizing demand for factor input labour is 48%. The paper shows that an economy of scale has relative advantage over cost-minimizing input choice in minimizing average production cost in the public university.

Appropriate handling of ‘critical’ laboratory test result values is an essential component of timely, quality patient care. While interinstitutional variability exists,1 critical values have historically been defined as potentially ‘life-threatening’...

Ambiguity Resolution (AR) plays a vital role in precise GNSS positioning. Correctly-fixed integer ambiguities can significantly improve the positioning solution, while incorrectly-fixed integer ambiguities can bring large positioning errors and, therefore, should be avoided. The ratio test is an extensively used test to validate the fixed integer ambiguities. To choose proper critical values of the ratio test, the Fixed Failure-rate Ratio Test (FFRT) has been proposed, which generates critical values according to user-defined tolerable failure rates. This contribution provides easy-to-implement fitting functions to calculate the critical values. With a massive Monte Carlo simulation, the functions for many different tolerable failure rates are provided, which enriches the choices of critical values for users. Moreover, the fitting functions for the fix rate are also provided, which for the first time allows users to evaluate the conditional success rate, i.e., the success rate once the integer candidates are accepted by FFRT. The superiority of FFRT over the traditional ratio test regarding controlling the failure rate and preventing unnecessary false alarms is shown by a simulation and a real data experiment. In the real data experiment with a baseline of 182.7 km, FFRT achieved much higher fix rates (up to 30% higher) and the same level of positioning accuracy from fixed solutions as compared to the traditional critical value.

Countries such as Germany and Switzerland have included the energy transition in their policy programs, setting specific targets in terms of energy production from renewables. However, the energy transition has a cost, which so far has been partly covered by subsidizing the clean production. This has produced an adverse effect, leading to overproduction in the clean sector and negative prices in the electricity spot market. An excessive subsidy, which does not takes into account technological spillovers and the elasticity of substitution, might be the cause. We use endogenous growth theory to study how the cost of the energy transition - proxied by a subsidy - is affected by these two channels. We provide a numerical solution to the model to give an insight into the magnitude of the effect considered. The main findings are: (1) technological spillovers reduce the cost of the energy transition and the subsidy becomes negative after a threshold value of relative spillover intensities; (2) a higher elasticity of substitution between the two sectors increases the cost of the energy transition.

Countries such as Germany and Switzerland have included the energy transition in their policy programs, setting specific targets in terms of energy production from renewables. However, the energy transition has a cost, which so far has been partly covered by subsidizing the clean production. This has produced an adverse effect, leading to overproduction in the clean sector and negative prices in the electricity spot market. An excessive subsidy, which does not takes into account technological spillovers and the elasticity of substitution, might be the cause. We use endogenous growth theory to study how the cost of the energy transition - proxied by a subsidy - is affected by these two channels. We provide a numerical solution to the model to give an insight into the magnitude of the effect considered. The main findings are: (1) technological spillovers reduce the cost of the energy transition and the subsidy becomes negative after a threshold value of relative spillover intensities; (2) a higher elasticity of substitution between the two sectors increases the cost of the energy transition.

Objective To explore the influence of different mental status (evaluated by Likert scale) on the first success rate, image artifacts and examination time of cone beam CT (CBCT) in infants and young children. Methods Prospective analysis of children aged 1-6 years (98 cases) who underwent CBCT examination, before the examination, the children were scored in seven aspects: activity, adaptability, attention, mood, gender, age and parents′ attitude, and the total score was calculated, The total score was used as the test variable, and the success rate of the first examination, the artifact of the image and whether the examination time was longer than 2 minutes were used as the state variable. Using SPSS 16.0 to draw the ROC curve, the area under curve (AUC), significance, maximum Yoden′s index and their corresponding diagnostic (evaluation) critical values were obtained. Results The success rate of the first examination was 78.6%(77/98), the AUC was 0.949 ± 0.025, the significance P < 0.05, the maximum Yoden′s index was 0.766, the corresponding critical value of diagnosis (evaluation) was 15; the artifact-free rate was 67.3%(66/98), the AUC was 0.873±0.038, the significance P < 0.05, the maximum Yoden′s index was 0.549, and the corresponding critical value of diagnosis (evaluation) was 15; the proportion of examination time in 2 minutes was 80.6%(79/98), the AUC was 0.854 ± 0.039, the significant P < 0.05, the maximum Yoden′s index was 0.614, and the corresponding critical value of diagnosis (evaluation) was 14. Conclusions The Likert scale scoring method based on Thomas′s temperament analysis theory has certain application value in the psychological evaluation of children before cone-beam CT examination. For children whose total score is greater than or equal to 14, sedation or psychological counseling should be carried out before examination in order to effectively improve the success rate of examination and reduce the occurrence rate of artifacts in images, further more to reduce radiation dosage and increase the examination circulation of CBCT in children. Key words: Children; Temperament; Likert scale evaluation; Cone beam CT