Timing of Technology Adoption and Product Market Competition

32 Pages Posted: 7 Jul 2009

See all articles by Chrysovalantou Milliou

Chrysovalantou Milliou

Athens University of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute)

Emmanuel Petrakis

University of Crete - Department of Economics

Date Written: June 2009

Abstract

This paper examines how product market competition affects firms’ timing of adopting a new technology as well as whether the market provides sufficient adoption incentives. It shows that adoption dates differ not only among symmetric firms but also among markets with Cournot and Bertrand competition. More specifically, Cournot competition can lead to earlier adoption than Bertrand competition. It shows also that competition toughness does not always reinforce adoption incentives. When goods are differentiated enough, adoption occurs later than it is socially optimal.

Keywords: technology adoption, innovation, diffusion, product differentiation

JEL Classification: L13, O31, O32, O33

Suggested Citation

Milliou, Chrysovalantou and Petrakis, Emmanuel, Timing of Technology Adoption and Product Market Competition (June 2009). CESifo Working Paper Series No. 2686, Available at SSRN: https://ssrn.com/abstract=1430282 or http://dx.doi.org/10.2139/ssrn.1430282

Chrysovalantou Milliou (Contact Author)

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Emmanuel Petrakis

University of Crete - Department of Economics ( email )

GR-74100 Rethymnon, GR-74100
Greece
+30 28310 77409 (Phone)
+30 28310 77406 (Fax)

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