Technology Imports and Decision Criteria of the Schumpeterian Entrepreneur under Uncertainty

Abstract

While, suprisingly, in discussion of technology trade little attention has been focused on the behavior of the technologyimporter, this paper shows that there can exist different sets of decision criteria for a Schumpeterian entrepreneur who imports foreign technology under uncertainty. A Schumpeterian entrepreneur has four sets of decision criteria: 1) the existence of potential bound for the effective gross output net of royalties; 2) the shape of randomness-indifference locus; 3) the evaluation of the magnitude of boundedness in the effective gross output net of royalties; 4) the market interest rate.