Preemptive Adoptions of an Emerging Technology

Michael Riordan and David Salant

Journal of Industrial Economics, 1994, vol. 42, issue 3, 247-61

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.

Date: 1994
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Working Paper: Preemptive Adoptions of an Emerging Technology (1992)
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