[OPE-L:4017] Re: More Depreciation Questions

Chai-on Lee (conlee@chonnam.chonnam.ac.kr)
Fri, 17 Jan 1997 19:56:55 -0800 (PST)

[ show plain text ]

At Michael Perelman wrote:

>Andrew, consider this simple example: I buy a computer. The expected
>lifetime is 10 years. New technology makes me scrap it in 3 years. I
>would say that the transfer of value takes place over 3, not 10 years,
>but this transfer can be calculated only ex post.
>andrew kliman wrote:

The transfer needs to be calculated ex ante, although it cannot be accurate,
so as to price the outputs' sale price. By EXPERIENCE, the capitalists have
developed a skill (a technology or a scientific knowledge) in the estimation
of the economic life of fixed capitals. Successful capitalists are such
persons. Other capitalists who failed in the accurate estimation must be
weeded out in the capitalist competition. Otherwise, there can be no reason
of the existence of the business studies.

With regards,