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On Vertical Relations and Technology Adoption Timing

Author

Listed:
  • Maria Alipranti

    (University of Crete)

  • Chrysovalantou Miliou

    (Department of Economics, Universidad Carlos III de Madrid, Calle Madrid 126, Getafe (Madrid))

  • Emmanuel Petrakis

    (Department of Economics, University of Crete, Greece)

Abstract

This paper explores how vertical relations influence the timing of new technology adoption. It shows that both the bargaining power distribution among the vertically related firms and the contract type through which vertical trading is conducted affect crucially the speed of adoption: the downstream firms can adopt later a new technology when the upstream bargaining power increases as well as when wholesale price contracts, instead of two-part tariffs, are employed. Importantly, it shows that technology adoption can take place earlier when firms obtain their inputs from external suppliers than when they produce them in-house; hence, the presence of vertical relations can accelerate the adoption of a new technology.

Suggested Citation

  • Maria Alipranti & Chrysovalantou Miliou & Emmanuel Petrakis, 2014. "On Vertical Relations and Technology Adoption Timing," Working Papers 1502, University of Crete, Department of Economics.
  • Handle: RePEc:crt:wpaper:1502
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    Cited by:

    1. Smirnov, Vladimir & Wait, Andrew, 2021. "Preemption with a second-mover advantage," Games and Economic Behavior, Elsevier, vol. 129(C), pages 294-309.
    2. Di Corato, Luca & Moretto, Michele & Rossini, Gianpaolo, 2017. "Financing flexibility: The case of outsourcing," Journal of Economic Dynamics and Control, Elsevier, vol. 76(C), pages 35-65.
    3. Benoit Voudon, 2019. "Vertical Integration in the presence of a Cost-Reducing Technology," Trinity Economics Papers tep0919, Trinity College Dublin, Department of Economics.
    4. Alipranti, Maria & Milliou, Chrysovalantou & Petrakis, Emmanuel, 2015. "On vertical relations and the timing of technology adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 117-129.
    5. Benoit Voudon, 2019. "Technology Adoption under Asymmetric Market Structure," Trinity Economics Papers tep0819, Trinity College Dublin, Department of Economics.
    6. Céline Bonnet & Jan Philip Schain, 2020. "An Empirical Analysis Of Mergers: Efficiency Gains And Impact On Consumer Prices," Journal of Competition Law and Economics, Oxford University Press, vol. 16(1), pages 1-35.
    7. Maria Alipranti & Emmanuel Petrakis, 2022. "Upstream market structure and the timing of technology adoption," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1298-1310, July.
    8. M. Moretto & G. Rossini, 2015. "Vertical flexibility, outsourcing and the financial choices of the firm," Working Papers wp1009, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. Xingtang Wang & Jie Li, 2020. "Downstream rivals’ competition, bargaining, and welfare," Journal of Economics, Springer, vol. 131(1), pages 61-75, September.
    10. Luca Sandrini, 2020. "Innovation, Competition, and Incomplete Adoption of a Superior Technology," "Marco Fanno" Working Papers 0251, Dipartimento di Scienze Economiche "Marco Fanno".

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    More about this item

    Keywords

    Technology adoption; vertical relations; two-part tariffs; wholesale price contracts; bargaining;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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