Vested Interests and Resistance to Technology Adoption
Henri de Groot () and
No 1999-106, Discussion Paper from Tilburg University, Center for Economic Research
Employed technologies differ vastly across countries. Within countries many technologies that would obviously improve firms’ efficiency are not adopted. This paper explains these observations by emphasizing that a new technology positively affects workers by lowering prices and increasing their real income, but also negatively by costs of getting acquainted with the new technology. If the costs of adoption for workers exceed the benefits, they will aim at keeping the old technology in place. We formalise the trade-off in a simple OLG model with majority voting. Age groups that lose from adopting resist. Successful resistance blocks adoption and hence lowers growth. Finally, we analyse the effects of tougher competition. Provided that consumption and leisure are relatively good substitutes, tougher competition mitigates resistance and thus favours economic growth as it increases the share of the rent associated with the new technology that is being captured by the workers.
Keywords: technological change; resistance; vested interests; overlapping generations; competition (search for similar items in EconPapers)
JEL-codes: O14 O33 O41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:tiu:tiucen:0ccbafa5-3dcf-45f7-88b8-0d743d1e3387
Access Statistics for this paper
More papers in Discussion Paper from Tilburg University, Center for Economic Research
Bibliographic data for series maintained by Richard Broekman ().