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Timing of technology adoption and product market competition

Chrysovalantou Milliou () and Emmanuel Petrakis ()

International Journal of Industrial Organization, 2011, vol. 29, issue 5, 513-523

Abstract: This paper examines how product market competition affects firms' timing of adopting a new technology, as well as whether the market provides sufficient adoption incentives. It demonstrates that adoption dates differ, not only among symmetric firms, but also among markets with different market features. More specifically, technology adoption can occur earlier in a market with Cournot competition than in a market with Bertrand competition. It can also occur earlier in a market in which goods are not too close substitutes. Therefore, this paper shows that competition toughness does not always reinforce adoption incentives. When goods are sufficiently differentiated, adoption occurs later than is socially optimal.

Keywords: Technology; adoption; Innovation; Diffusion; Product; differentiation (search for similar items in EconPapers)
Date: 2011
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Working Paper: Timing of Technology Adoption and Product Market Competition (2009) Downloads
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Handle: RePEc:eee:indorg:v:29:y:2011:i:5:p:513-523