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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
Date of revision:
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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Cited by:
  1. Brant Callaway & Vivek Ghosal, 2012. "Adoption and Diffusion of Health Information Technology - The Case of Primary Care Clinics," CESifo Working Paper Series 3925, CESifo Group Munich.
  2. Ferdinand Rauch, 2008. "An explanation for the inverted-U relationship between competition and innovation," Vienna Economics Papers 0813, University of Vienna, Department of Economics.
  3. Chong, Alberto & Micco, Alejandro, 2003. "The Internet and the ability to innovate in Latin America," Emerging Markets Review, Elsevier, vol. 4(1), pages 53-72, March.
  4. Jonathan Beck & Michal Grajek & Christian Wey, 2005. "Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning," CIG Working Papers SP II 2005-19, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  5. Bulent Unel, 2013. "The Interaction Between Technology Adoption and Trade When Firms are Heterogeneous," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 797-808, 09.
  6. Ederington, Josh & McCalman, Phillip, 2013. "Technology adoption, government policy and tariffication," Journal of International Economics, Elsevier, vol. 90(2), pages 337-347.
  7. Pulkki-Brännström, Anni-Maria & Stoneman, Paul, 2013. "On the patterns and determinants of the global diffusion of new technologies," Research Policy, Elsevier, vol. 42(10), pages 1768-1779.
  8. Koellinger, Ph.D., 2008. "The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence on E-Business in Europe," ERIM Report Series Research in Management ERS-2008-031-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  9. Gotz, Georg, 2000. "Strategic timing of adoption of new technologies under uncertainty: A note," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 369-379, February.

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