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Discontinuous Adoption Paths with Dynamic Scale Economies

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Author Info
Agliardi, Elettra

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Abstract

The purpose of the paper is to show that 'catastrophes' can arise in a simple model of the adoption of innovations with increasing returns to adoption. The equilibrium adoption path for two innovations is studied when there are network externalities and heterogeneous potential adopters. Sufficient conditions for a discontinuous equilibrium adoption path are derived. Copyright 1995 by The London School of Economics and Political Science.

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Publisher Info
Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 62 (1995)
Issue (Month): 248 (November)
Pages: 541-49
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Handle: RePEc:bla:econom:v:62:y:1995:i:248:p:541-49

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