Abstract
We show that the market does not systematically deliver the right technology under monopolistic competition. (i) Firms might rush on large-scale technology, pushing to the exit many desirable varieties produced by small firms. (ii) Firms might shun large-scale technology, though that technology would benefit the society through lower prices. (iii) A bias towards small-scale technology in some stage of development, and a bias towards large-scale technology in another stage is also a possibility.
Original language | English |
---|---|
Pages (from-to) | 95-98 |
Number of pages | 4 |
Journal | Economics Letters |
Volume | 150 |
DOIs | |
Publication status | Published - 1 Jan 2017 |
Keywords
- Monopolistic competition
- Productivity
- Technology
- Welfare