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Journal of Evolutionary Economics

, Volume 2, Issue 2, pp 147–158 | Cite as

Competition among techniques in the presence of increasing returns to scale

  • Bruno Amable
Article

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.

Key words

Technological diffusion Technological competition Increasing returns to scale 

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Copyright information

© Springer-Verlag 1992

Authors and Affiliations

  • Bruno Amable
    • 1
  1. 1.Unité de Recherche HEDMInstitut National de la Recherche Agronomique (INRA)Ivry CedexFrance

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