Innovation Cycles Control through Markov Decision Processes

Vassil S. Sgurev, Stanislav T. Drangajov, Lyubka A. Doukovska, Vassil G. Nikov

Abstract

Innovations are introduced in several cycles, or steps which are of stochastic character. Successful completion of each cycle results in the beginning of the next one. Initial stages are connected with expenses of risk (venture) capital and the investments are returned in the final stages, usually with quite big profit. A helpful approach for control of the innovation process is the use of Markov decision processes which have proved to be an efficient tool for control of multi state stochastic processes. Those stages may be summarizes as: 1 – prestart stage; 2 – start stage; 3 – initial expansion stage; 4 – quick expansion stage; 5 – stage of reaching liquidity of venture investments; 6 – stage of project failure and its cancelling. The transition from state to state may be controlled through control techniques of Markov Decision Processes so that maximum profit is achieved in shortest time. The stages are conditional and some of them may be united, e.g. 1 and 2, or 3 and 4.

References

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Paper Citation


in Harvard Style

S. Sgurev V., T. Drangajov S., Doukovska L. and G. Nikov V. (2013). Innovation Cycles Control through Markov Decision Processes . In Proceedings of the Third International Symposium on Business Modeling and Software Design - Volume 1: BMSD, ISBN 978-989-8565-56-3, pages 286-291. DOI: 10.5220/0004776602860291


in Bibtex Style

@conference{bmsd13,
author={Vassil S. Sgurev and Stanislav T. Drangajov and Lyubka A. Doukovska and Vassil G. Nikov},
title={Innovation Cycles Control through Markov Decision Processes},
booktitle={Proceedings of the Third International Symposium on Business Modeling and Software Design - Volume 1: BMSD,},
year={2013},
pages={286-291},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0004776602860291},
isbn={978-989-8565-56-3},
}


in EndNote Style

TY - CONF
JO - Proceedings of the Third International Symposium on Business Modeling and Software Design - Volume 1: BMSD,
TI - Innovation Cycles Control through Markov Decision Processes
SN - 978-989-8565-56-3
AU - S. Sgurev V.
AU - T. Drangajov S.
AU - Doukovska L.
AU - G. Nikov V.
PY - 2013
SP - 286
EP - 291
DO - 10.5220/0004776602860291