THE EFFECTS OF TECHNOLOGICAL CHANGE ON THE QUALITY AND VARIETY OF INFORMATION PRODUCTS

David Waterman

Economics of Innovation and New Technology, 2007, vol. 16, issue 8, 587-594

Abstract: Anecdotal evidence suggests that producers of information products (TV programs, movies, computer software) may respond to potentially cost-saving technological change by increasing, rather than reducing, their total production investments in the 'first copy' of each product, possibly at the expense of product variety. Comparative statics show that under reasonable assumptions about consumer demand and production technology, competitive firms in a monopolistically competitive industry are in fact induced to increase first-copy investments as a result of either what we define as 'quality-enhancing' or 'cost-reducing' types of technological advance, whereas product variety either falls or stays the same. Results suggest that contrary to often held expectations, potentially cost-saving technological advances in information industries may result in greater market concentration.

Keywords: Information products; Product variety; Product quality; Technological change (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/10438590600925144 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:16:y:2007:i:8:p:587-594

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GEIN20

DOI: 10.1080/10438590600925144

Access Statistics for this article

Economics of Innovation and New Technology is currently edited by Professor Cristiano Antonelli

More articles in Economics of Innovation and New Technology from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().