We incorporate strategic considerations into the analysis of a problem that has hitherto been treated in a decision theoretic fashion: the allocation of scarce R&D resources when R&D proceeds in stages. In doing so, we formalize a notion of "system complexity" and investigate its implications...

We present a historical study of technological evolution in the mainframe computer industry. We show that the pattern of innovation in the industry is not well characterized by existing models. The incremental evolution of mainframe system performance as seen by the customer was the result of an...