OPTIMAL EXPANSION AND DESIGN OF COMPETENCE SETS WITH ASYMMETRIC ACQUIRING COSTS

This paper provides a method of finding the optimal expansion process and discusses the marginal analysis for expansion of the competence se t when the cost functions are asymmetric. The concept of tree expansio n process is introduced, and a method of finding the optimal tree expa nsion process is given. The paper also shows a way to identify the opt imal competence set when both the expected return and cost are conside red.