Monopolistic Competition and the Diffusion of New Technology
Volume: Volume 30, No. 4
Issue: Winter 1999
Pages: pp. 679-693
Authors: Georg Götz
Title: Monopolistic Competition and the Diffusion of New Technology
Abstract: This article analyzes the adoption and diffusion of new technology in a market for a differentiated product with monopolistic competition. I show that in a noncooperative equilibrium ex ante identical firms adopt a new technology at different dates. This equilibrium can be described by a simple distribution function. For nonidentical firms, I state the conditions under which a positive relationship between firm size and speed of adoption exists. The model integrates rank and stock effects. I demonstrate that increased competition often promotes diffusion.
JEL Classification
Market Structure, Firm Strategy, and Market Performance:
Oligopoly and Other Imperfect Markets; monopolistic competition; contestable markets (L130)
Innovation and Invention: Processes and Incentives (O310)
Diffusion
Firm, Firms
Monopolistic Competition
Technology