TECHNOLOGY VALUATION DISTRIBUTIONS WITH HETEROGENEOUS ADOPTERS

James F. Oehmke and Christopher Wolf ()

No 19777, 2002 Annual meeting, July 28-31, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper examines technology benefit allocation between an innovating firm and heterogeneous technology adopters. Using a triangular distribution of adopter innovation value, we find that as the upper bound increases, optimal innovation price increases, but at a slower rate. Similarly, as the lower bound decreases, price decreases and producer benefits increase. Finally, greater producer heterogeneity leads to greater producer benefits from innovation in non-competitive markets. An empirical application of the model is considered, bovine somatotropin adoption on dairy farms. The model generates an intuitive explanation of the common finding that average adopters are making zero or negative profits.

Keywords: Research; and; Development/Tech; Change/Emerging; Technologies (search for similar items in EconPapers)
Pages: 18
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea02:19777

DOI: 10.22004/ag.econ.19777

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