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On the Competitive Response to Technological Advance

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  • Fathali Firoozi

Abstract

When the competitive firm is operating in a stochastic environment and certain conditions regarding expectations and attitude toward risk hold, the response to a neutral technological advance is to reduce factor employment and raise output. The result contradicts the standard deterministic response, which emerges as a special case in the stochastic environment. (JEL, D81)

Suggested Citation

  • Fathali Firoozi, 1995. "On the Competitive Response to Technological Advance," The American Economist, Sage Publications, vol. 39(2), pages 61-64, October.
    • Handle: RePEc:sae:amerec:v:39:y:1995:i:2:p:61-64
    DOI: 10.1177/056943459503900207
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    References listed on IDEAS

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    1. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
    2. Richard Hartman, 1973. "Adjustment Costs, Price and Wage Uncertainty, and Investment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(2), pages 259-267.
    3. Batra, Raveendra N & Ullah, Aman, 1974. "Competitive Firm and the Theory of Input Demand under Price Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 537-548, May/June.
    4. Turnovsky, Stephen J, 1973. "Production Flexibility, Price Uncertainty and the Behavior of the Competitive Firm," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 395-413, June.
    5. Larry Epstein, 1978. "Production Flexibility and the Behaviour of the Competitive Firm under Price Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(2), pages 251-261.
    6. Hartman, Richard, 1976. "Factor Demand with Output Price Uncertainty," American Economic Review, American Economic Association, vol. 66(4), pages 675-681, September.
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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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