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Competition among Techniques in the Presence of Increasing Returns to Scale

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  • Amable, Bruno

Abstract

A model of technology diffusion and growth originally proposed by Batten (1987), taking into account the interaction of the supply of and demand for a new product, is modified so as to admit a production technology with increasing returns to scale and the possibility of a competition between two techniques. On the opposite to the case where the production technology of the new technique exhibits decreasing returns, the presence of increasing returns to scale prevent the splitting of the market between two new techniques, and the monopoly position of one technique must obtain. The winning technique may not be the most efficient in terms of its market expansion potential, the outcome of competition depends on initial conditions on production capacity and diffusion.

Suggested Citation

  • Amable, Bruno, 1992. "Competition among Techniques in the Presence of Increasing Returns to Scale," Journal of Evolutionary Economics, Springer, vol. 2(2), pages 147-158, August.
    • Handle: RePEc:spr:joevec:v:2:y:1992:i:2:p:147-58
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    Cited by:

    1. Foster, John, 1995. "The impact of the self organisation approach on economic science: why economic theory and history need no longer be mutually exclusive domains," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 39(3), pages 393-398.
    2. Marc Dijk & René Kemp & Pieter Valkering, 2013. "Incorporating social context and co-evolution in an innovation diffusion model—with an application to cleaner vehicles," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 295-329, April.
    3. Sarkar, Jayati, 1998. "Technological Diffusion: Alternative Theories and Historical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 12(2), pages 131-176, April.
    4. Riccardo Leoncini & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2008. "You Won the Battle. What about the War? A Model of Competition between Proprietary and Open Source Software," Department of Economics Working Papers 0811, Department of Economics, University of Trento, Italia.
    5. Ziesemer, Thomas, 1993. "Dynamic Oligopolistic Pricing with Endogenous Change in Market Structure and Market Potential in an Epidemic Diffusion Model," MPRA Paper 61831, University Library of Munich, Germany.
    6. Silverberg, Gerald, 1997. "Evolutionary modeling in economics : recent history and immediate prospects," Research Memorandum 008, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).

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