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Learning, Complementarities, and Asynchronous Use of Technology

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  • Boyan Jovanovic
  • Dmitriy Stolyarov

Abstract

This paper deals with processes that require several complementary inputs subject to improvements in quality. If after a quality upgrade one of these inputs requires a period of learning before it can be used effectively, then in general it will pay to purchase the inputs at different dates -- the purchases will be asynchronous. That is so because it is wasteful to tie up funds in the other inputs which will be underutilized until the date learning is over. We provide evidence that technology has been used asynchronously in the automobile industry, in the television broadcasting industry, in electricity supply, and in railways, and we argue that our model helps explain this evidence.

Suggested Citation

  • Boyan Jovanovic & Dmitriy Stolyarov, 1997. "Learning, Complementarities, and Asynchronous Use of Technology," NBER Working Papers 5870, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5870
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    References listed on IDEAS

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    2. Eytan Sheshinski & Yoram Weiss, 1992. "Staggered and Synchronized Price Policies Under Inflation: The Multiproduct Monopoly Case," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(2), pages 331-359.
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    4. Cooper, Russell & Haltiwanger, John, 1993. "The Aggregate Implications of Machine Replacement: Theory and Evidence," American Economic Review, American Economic Association, vol. 83(3), pages 360-382, June.
    5. Ricardo J. Caballero & Mohamad L. Hammour, 1996. "On the Timing and Efficiency of Creative Destruction," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 805-852.
    6. Bahk, Byong-Hong & Gort, Michael, 1993. "Decomposing Learning by Doing in New Plants," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 561-583, August.
    7. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    8. Jess Benhabib & Kazuo Nishimura, 2012. "Competitive Equilibrium Cycles," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 75-96, Springer.
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    Citations

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    Cited by:

    1. Johannes Van Biesebroeck, 2007. "Complementarities in automobile production," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1315-1345.
    2. Vahter, Priit & Vadi, Maaja, 2024. "The relationship of technological and organizational innovation with firm performance: Opening the black box of dynamic complementarities," Technological Forecasting and Social Change, Elsevier, vol. 206(C).
    3. Priit Vahter & Maaja Vadi, 2022. "The Relationship Of Technological And Organizational Innovation With Firm Performance: Opening The Black Box Of Dynamic Complementarities," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 138, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    4. Howell, Bronwyn & Obren, Mark, 2002. "Broadband Diffusion: Lags from Vintage Capital, Learning by Doing, Information Barriers and Network Effects," Working Paper Series 3896, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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