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Preemptive Adoptions of an Emerging Technology

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  • Riordan, Michael H
  • Salant, David J

Abstract

Many oligopolies exhibit continuing technological change and lumpy costs of adopting new technologies. If firms choose adoption dates in a game of timing and if the downstream market structure is a Bertrand duopoly, the equilibrium adoption pattern displays rent-dissipating increasing dominance, i.e., all adoptions are by the same firm, and the discounted value of profits is zero. These results need not hold for other market structures, including Cournot duopoly. Copyright 1994 by Blackwell Publishing Ltd.

Suggested Citation

  • Riordan, Michael H & Salant, David J, 1994. "Preemptive Adoptions of an Emerging Technology," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 247-261, September.
  • Handle: RePEc:bla:jindec:v:42:y:1994:i:3:p:247-61
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    1. repec:eee:tefoso:v:129:y:2018:i:c:p:285-296 is not listed on IDEAS
    2. Bergman, Mats A., 1998. "Endogenous Timing of Investments Yields Modified Stackelberg Outcomes," SSE/EFI Working Paper Series in Economics and Finance 272, Stockholm School of Economics.
    3. Maria Alipranti & Chrysovalantou Miliou & Emmanuel Petrakis, 2014. "On Vertical Relations and Technology Adoption Timing," Working Papers 1502, University of Crete, Department of Economics.
    4. A. Mahathi & Rupayan Pal & Vinay Ramani, 2016. "Competition, strategic delegation and delay in technology adoption," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(2), pages 143-171, March.
    5. Fedor Iskhakov & John Rust & Bertel Schjerning, 2013. "The Dynamics of Bertrand Price Competition with Cost-Reducing Investments," Discussion Papers 13-05, University of Copenhagen. Department of Economics.
    6. Greenstein, Shane & Ramey, Garey, 1998. "Market structure, innovation and vertical product differentiation," International Journal of Industrial Organization, Elsevier, vol. 16(3), pages 285-311, May.

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