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Monopolistic Competition and the Diffusion of New Technology

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  • Georg GÖTZ

Abstract

This article analyzes the adoption and diffusion of new technology in a market for a differentiated product with monopolistic competition. I show that in a noncooperative equilibrium ex ante identical firms adopt a new technology at different dates. This equilibrium can be described by a simple distribution function. For nonidentical firms, I state the conditions under which a positive relationship between firm size and speed of adoption exists. The model integrates rank and stock effects. I demonstrate that increased competition often promotes diffusion.

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Bibliographic Info

Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number vie9610.

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Date of creation: Jun 1996
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Publication status: published in the RAND Journal of Economics.
Handle: RePEc:vie:viennp:vie9610

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Web page: http://www.univie.ac.at/vwl

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