BOUCEKKINE, RAOUF; SAGLAM, Cagri; VALLÉE, Thomas - Center for Operations Research and Econometrics (CORE), … - 2003
We use two stage optimal control techniques to solve some adoption problems under embodied technical change. We first solve a benchmark problem without learning behavior. At the date of switching, the consumption level is shown to drop, as the relative price of capital goes down (obsolescence)....