Technology Adoption under Imperfect Information
Copyright policy )Technology Adoption under Imperfect Information
This paper presents a static game theoretic model of a firm's decision to adopt a technological innovation of uncertain profitability which will reduce the production cost associated with the firm's output. Given the levels of adoption costs, discount rates and expectations regarding the profitability of the innovation, we determine the (Nash equilibrium) range of initial production costs for which each firm prefers to adopt the innovation. In addition, we ask whether a high-cost or a low-cost firm will be more likely to innovate, and whether a firm will be more likely to innovate if its rival is a high-cost or a low-cost firm.
Published as Reinganum, Jennifer F. "Technology adoption under imperfect information." The Bell Journal of Economics (1983): 57-69.
Submitted - sswp407.pdf
- California Institute of Technology United States
330, Imperfect information, High cost technology, Unit costs, Technological innovation, Nash equilibrium, Production costs, Innovation adoption, Emerging technology, Nash equilibrium, Emerging technology, Technological innovation, Innovation adoption, Dominant strategy, Production costs, Game theory, High cost technology, Unit costs, Imperfect information, Dominant strategy, Game theory
330, Imperfect information, High cost technology, Unit costs, Technological innovation, Nash equilibrium, Production costs, Innovation adoption, Emerging technology, Nash equilibrium, Emerging technology, Technological innovation, Innovation adoption, Dominant strategy, Production costs, Game theory, High cost technology, Unit costs, Imperfect information, Dominant strategy, Game theory
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