Details
| Original language | English |
|---|---|
| Pages (from-to) | 315-338 |
| Number of pages | 24 |
| Journal | International Journal of Industrial Organization |
| Volume | 18 |
| Issue number | 2 |
| Early online date | 13 Jan 2000 |
| Publication status | Published - Feb 2000 |
| Externally published | Yes |
Abstract
This paper introduces technological uncertainty into a timing game of new technology adoption. It is shown that the timing neither necessarily involves first-mover advantages in precommitment equilibria (Reinganum, Review of Economic Studies, XLVIII (1981) 395-405) nor rent-equalization due to the threat of preemption (Fudenberg and Tirole, Review of Economic Studies, LII (1985) 383-401). Rather, there may be second-mover advantages because of informational spillovers. Furthermore, the model predicts that the equilibrium payoffs will typically be discontinuous and non-monotonic in the probability that the new technology is profitable. A welfare analysis reveals several market failures, and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress.
Keywords
- Innovation, L13, O31, O32, Technological uncertainty, Timing
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Industrial relations
- Engineering(all)
- Aerospace Engineering
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
- Economics, Econometrics and Finance(all)
- Economics, Econometrics and Finance (miscellaneous)
- Business, Management and Accounting(all)
- Strategy and Management
- Engineering(all)
- Industrial and Manufacturing Engineering
Sustainable Development Goals
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In: International Journal of Industrial Organization, Vol. 18, No. 2, 02.2000, p. 315-338.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Second-mover advantages in the strategic adoption of new technology under uncertainty
AU - Hoppe, Heidrun C.
N1 - Funding Information: I would like to thank Reiko Aoki, Richard Jensen, Ulrich Lehmann-Grube, Sujoy Mukerji, Wilhelm Pfähler, the editor, two anonymous referees, and seminar participants at the Universities of Hamburg, Kentucky, and Southampton, SUNY Stony Brook, and WZB for helpful comments and suggestions. Financial support by the German Marshall Fund of the United States through grant no. A-0375-02 is gratefully acknowledged.
PY - 2000/2
Y1 - 2000/2
N2 - This paper introduces technological uncertainty into a timing game of new technology adoption. It is shown that the timing neither necessarily involves first-mover advantages in precommitment equilibria (Reinganum, Review of Economic Studies, XLVIII (1981) 395-405) nor rent-equalization due to the threat of preemption (Fudenberg and Tirole, Review of Economic Studies, LII (1985) 383-401). Rather, there may be second-mover advantages because of informational spillovers. Furthermore, the model predicts that the equilibrium payoffs will typically be discontinuous and non-monotonic in the probability that the new technology is profitable. A welfare analysis reveals several market failures, and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress.
AB - This paper introduces technological uncertainty into a timing game of new technology adoption. It is shown that the timing neither necessarily involves first-mover advantages in precommitment equilibria (Reinganum, Review of Economic Studies, XLVIII (1981) 395-405) nor rent-equalization due to the threat of preemption (Fudenberg and Tirole, Review of Economic Studies, LII (1985) 383-401). Rather, there may be second-mover advantages because of informational spillovers. Furthermore, the model predicts that the equilibrium payoffs will typically be discontinuous and non-monotonic in the probability that the new technology is profitable. A welfare analysis reveals several market failures, and suggests that policy intervention should adequately depend on the nature of uncertainty and the rate of technological progress.
KW - Innovation
KW - L13
KW - O31
KW - O32
KW - Technological uncertainty
KW - Timing
UR - http://www.scopus.com/inward/record.url?scp=0034409893&partnerID=8YFLogxK
U2 - 10.1016/s0167-7187(98)00020-4
DO - 10.1016/s0167-7187(98)00020-4
M3 - Article
AN - SCOPUS:0034409893
VL - 18
SP - 315
EP - 338
JO - International Journal of Industrial Organization
JF - International Journal of Industrial Organization
SN - 0167-7187
IS - 2
ER -