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Technology Licensing and Technology Alliances

Cristian Dezso and Luis Cabral

No 767, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: Frequently, new technologies arise under two or more alternative designs. Moreover, the state of each design evolves over time as a result of various cumulative improvements. In this paper, we study the strategic interaction between "incumbent" firms (those who already own a design) and "entrants" (those who do not but would like to adopt the new technology). We focus on two important decisions by an entrant: when to adopt the new technology and which design to choose. We show that if the entrant is primarily a production firm, then it should follow the leading technology, whereas a research-intensive entrant should follow the lagging technology. Regarding the time for technology adoption, we show that the entrant should make its decision as early as possible

Keywords: new technology adoption; alliances (search for similar items in EconPapers)
JEL-codes: L1 L5 (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed004:767

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More papers in 2004 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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