Technology adoption: Hysteresis and absence of lock-in
Paolo Colla () and
Filomena Garcia ()
Economics Letters, 2016, vol. 141, issue C, 107-111
We introduce a simple model of technology adoption with overlapping generations of players. Technologies generate network effects, and players are both backward- and forward-looking. We use results from the supermodular games literature to guarantee equilibrium existence and uniqueness. In line with the empirical literature, the equilibrium adoption path exhibits hysteresis and technologies cannot lock-in. We characterize the expected time of adoption, which can be seen as a measure of technology dominance.
Keywords: Path dependence; Supermodular games; Overlapping generations; Stochastic technology values (search for similar items in EconPapers)
JEL-codes: C73 D84 L14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:141:y:2016:i:c:p:107-111
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