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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.

Suggested Citation

  • Georg Götz, 1999. "Monopolistic Competition and the Diffusion of New Technology," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 679-693, Winter.
  • Handle: RePEc:rje:randje:v:30:y:1999:i:winter:p:679-693
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    Cited by:

    1. 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, September.
    2. Ederington, Josh & McCalman, Phillip, 2011. "Infant industry protection and industrial dynamics," Journal of International Economics, Elsevier, vol. 84(1), pages 37-47, May.
    3. Ferdinand Rauch, 2008. "An explanation for the inverted-U relationship between competition and innovation," Vienna Economics Papers 0813, University of Vienna, Department of Economics.
    4. Rivas, Javier, 2010. "The effects of the market structure on the adoption of evolving technologies," Journal of Economic Dynamics and Control, Elsevier, vol. 34(12), pages 2485-2493, December.
    5. Philipp Köllinger & Christian Schade, 2006. "Endogenous Acceleration of Technological Change," Discussion Papers of DIW Berlin 562, DIW Berlin, German Institute for Economic Research.
    6. 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.
    7. BOUCEKKINE, Raouf & LICANDRO, Omar & MINNITI, Antonio, 2004. "Adoption and diffusion of cost reducing innovations: Cournot competition in duopoly," CORE Discussion Papers 2004085, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Mukoyama, Toshihiko, 2006. "Rosenberg's "learning by using" and technology diffusion," Journal of Economic Behavior & Organization, Elsevier, vol. 61(1), pages 123-144, September.
    9. Milliou, Chrysovalantou & Petrakis, Emmanuel, 2011. "Timing of technology adoption and product market competition," International Journal of Industrial Organization, Elsevier, vol. 29(5), pages 513-523, September.
    10. Ederington, Josh & McCalman, Phillip, 2008. "Endogenous firm heterogeneity and the dynamics of trade liberalization," Journal of International Economics, Elsevier, vol. 74(2), pages 422-440, March.
    11. James G. Mulligan & Nilotpal Das, 2006. "Item Pricing Laws, Supplier Behavior, and the Diffusion of Time-Saving Technology Innovations," Working Papers 06-11, University of Delaware, Department of Economics.
    12. 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).
    13. James G. Mulligan & Nilotpal Das, 2004. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations: The Adoption of Optical Scanners by U.S. Supermarkets."," Working Papers 04-06, University of Delaware, Department of Economics.
    14. 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.
    15. Kshetri, Nir, 2005. "Information and communications technologies, strategic asymmetry and national security," Journal of International Management, Elsevier, vol. 11(4), pages 563-580, December.
    16. Ederington, Josh & McCalman, Phillip, 2013. "Technology adoption, government policy and tariffication," Journal of International Economics, Elsevier, vol. 90(2), pages 337-347.
    17. 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.
    18. 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.
    19. Philipp Köllinger & Christian Schade, 2003. "Analyzing E-Learning Adoption via Recursive Partitioning," Discussion Papers of DIW Berlin 346, DIW Berlin, German Institute for Economic Research.
    20. 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 University Rotterdam.
    21. Fuentelsaz, Lucio & Gómez, Jaime & Palomas, Sergio, 2012. "Production technologies and financial performance: The effect of uneven diffusion among competitors," Research Policy, Elsevier, vol. 41(2), pages 401-413.
    22. Kshetri, Nir, 2005. "Pattern of global cyber war and crime: A conceptual framework," Journal of International Management, Elsevier, vol. 11(4), pages 541-562, December.
    23. James G. Mulligan & Nilotpal Das, 2005. "Persistent Adoption of Time-Saving Process Innovations," Working Papers 05-03, University of Delaware, Department of Economics.

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