Technology Adoption under Asymmetric Market Structure

Benoit Voudon ()
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Benoit Voudon: Department of Economics, Trinity College Dublin

Economic Papers from Trinity College Dublin, Economics Department

Abstract: This paper examines the impact of vertical integration on the timing of adoption of a cost-reducing technology. Combining the technology adoption and vertical relations literatures in a simple duopoly model, I compare the technology adoption patterns under different vertical structures. In particular, the study of the asymmetric case, where one firm is integrated while the other one is separated, allows me to make three main contributions. First, I show that the effect of vertical integration on technology adoption by one firm is influenced significantly by the vertical structure of the other firm. Second, I consider the two main types of technology adoption games under an asymmetric set-up and broaden the understanding of the underlying mechanisms for the solving of such games. Finally, I develop an industrial policy aimed at encouraging firms to adopt the technology at the socially optimal timing.\

Keywords: precommitment game; preemption game; timing of technology adoption; vertical relations; vertical integration (search for similar items in EconPapers)
JEL-codes: L11 L22 L51 O33 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2019-09
New Economics Papers: this item is included in nep-cba, nep-his, nep-mac and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:tep0819

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