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Adoption and diffusion of cost reducing innovations: Cournot competition in duopoly

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  • BOUCEKKINE, Raouf
  • LICANDRO, Omar
  • MINNITI, Antonio

Abstract

This note analyses the adoption and diffusion of innovations in a horizontally differentiated Cournot duopoly in which firms have to choose the dates for adopting a cost-reducing new technology like in Reinganum (1981a). We prove that product differentiation crucially matters in the diffusion pattern of the innovation and in the comparison between the adoption timing in the decentralized economy Vs the social optimum.

Suggested Citation

  • BOUCEKKINE, Raouf & LICANDRO, Omar & MINNITI, Antonio, 2004. "Adoption and diffusion of cost reducing innovations: Cournot competition in duopoly," LIDAM Discussion Papers CORE 2004085, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2004085
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    References listed on IDEAS

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    1. Jennifer F. Reinganum, 1981. "On the Diffusion of New Technology: A Game Theoretic Approach," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(3), pages 395-405.
    2. Jennifer F. Reinganum, 1981. "Market Structure and the Diffusion of New Technology," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 618-624, Autumn.
    3. Herman C. Quirmbach, 1986. "The Diffusion of New Technology and the Market for an Innovation," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 33-47, Spring.
    4. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    5. Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(3), pages 383-401.
    6. 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.
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    Cited by:

    1. Wey, Christian & Beck, Jonathan & Grajek, Michal, 2005. "Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning," CEPR Discussion Papers 5386, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    adoption; di?usion; di?erentiated duopoly;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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