Adoption of an emerging infrastructure with uncertain technological learning and spatial reconfiguration

This paper develops a stylized (or conceptual) system optimization model to analyze the adoption of an emerging infrastructure associated with uncertain technological learning and spatial reconfigurations. The model first assumes that the emerging infrastructure will be implemented for the entire system when it is adopted. With the model, this paper explores (1) how the emerging infrastructure's initial investment cost, technological learning and its uncertainty, market size, and efficiency influence the adoption of the emerging infrastructure and (2) how the efficiency and investment cost of the associated technology (which will be located in a different place with the adoption of the emerging infrastructure) influence the adoption of the emerging infrastructure. Then, this paper extends the model and explores whether it is a better solution to implement the emerging infrastructure for part of the distance from resource site to demand site if its efficiency is a function of the implemented distance. With optimizations under three types of efficiency dynamics, this paper finds that whether the emerging infrastructure should be implemented partly or entirely is not determined by the value of its efficiency but by the dynamics of its efficiency.

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