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Timing of technology adoption and product market competition

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  • Milliou, Chrysovalantou
  • Petrakis, Emmanuel

Abstract

This paper examines how product market competition affects firms' timing of adopting a new technology, as well as whether the market provides sufficient adoption incentives. It demonstrates that adoption dates differ, not only among symmetric firms, but also among markets with different market features. More specifically, technology adoption can occur earlier in a market with Cournot competition than in a market with Bertrand competition. It can also occur earlier in a market in which goods are not too close substitutes. Therefore, this paper shows that competition toughness does not always reinforce adoption incentives. When goods are sufficiently differentiated, adoption occurs later than is socially optimal.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 29 (2011)
Issue (Month): 5 (September)
Pages: 513-523

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Handle: RePEc:eee:indorg:v:29:y:2011:i:5:p:513-523

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Web page: http://www.elsevier.com/locate/inca/505551

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Keywords: Technology adoption Innovation Diffusion Product differentiation;

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References

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Citations

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Cited by:
  1. Ben Jebli, Mehdi & Ben Youssef, Slim, 2012. "Timing of adoption of clean technologies, transboundary pollution and international trade," MPRA Paper 42467, University Library of Munich, Germany.
  2. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," CESifo Working Paper Series 2692, CESifo Group Munich.
  3. A. Mahati & Rupayan Pal, 2013. "Competition, strategic delegation and delay in technology adoption," Working Papers 2013-016, Madras School of Economics,Chennai,India.
  4. Maria Alipranti & Emmanuel Petrakis, 2012. "The speed of technological adoption under price competition: two-tier vs. one-tier industries," Working Papers 1307, University of Crete, Department of Economics, revised 08 May 2013.

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