IDEAS home Printed from https://ideas.repec.org/a/bpj/bejmac/v23y2023i2p753-790n10.html
   My bibliography  Save this article

Wealth Inequality and the Exploration of Novel Technologies

Author

Listed:
  • Spiganti Alessandro

    (Department of Economics, Ca’ Foscari University of Venice, Cannaregio 873, 30121, Venice, Italy)

Abstract

I investigate whether wealth inequality hinders the discovery of novel technologies in a competitive screening model. Agents can engage in exploration, which may lead to the discovery of superior technologies, but it is likely to waste time with inferior ones. Talented agents are better at weeding out inferior technologies, but talent is unobservable by lenders. When agents are poor, this causes an adverse selection problem whereby exploration is pursued by untalented agents rather than by talented ones. As economies become wealthier, the misallocation problem of talented agents weakens. Higher inequality worsens this misallocation problem when the economy is wealthy, but can increase efficiency in poor economies.

Suggested Citation

  • Spiganti Alessandro, 2023. "Wealth Inequality and the Exploration of Novel Technologies," The B.E. Journal of Macroeconomics, De Gruyter, vol. 23(2), pages 753-790, June.
    • Handle: RePEc:bpj:bejmac:v:23:y:2023:i:2:p:753-790:n:10
    DOI: 10.1515/bejm-2022-0073
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejm-2022-0073
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejm-2022-0073?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    inequality of opportunity; bandit problem; unobservable talent; competitive screening;
    All these keywords.

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejmac:v:23:y:2023:i:2:p:753-790:n:10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.