Does the market deliver the right technology?
Economics Letters, 2017, vol. 150, issue C, 95-98
We show that the market does not systematically deliver the right technology under monopolistic competition. (i) Firms might rush on large-scale technology, pushing to the exit many desirable varieties produced by small firms. (ii) Firms might shun large-scale technology, though that technology would benefit the society through lower prices. (iii) A bias towards small-scale technology in some stage of development, and a bias towards large-scale technology in another stage is also a possibility.
Keywords: Welfare; Monopolistic competition; Productivity; Technology (search for similar items in EconPapers)
JEL-codes: D1 D2 D4 L1 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:150:y:2017:i:c:p:95-98
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