Learning-by-Doing and the Choice of Technology: The Role of Patience

If agents learn-by-doing and are myopic, less advanced firms might adopt new technologies while more advanced firms stick with the old technology. This kind of overtaking can also occur if agents are forward looking and have high discount rates. However, overtaking never occurs if agents are sufficiently patient. A finite discount rate increases the set of states at which agents adopt new technologies, so more patient agents tend to upgrade their technology more frequently.


Issue Date:
2000
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25108
Total Pages:
26
JEL Codes:
D92; O14; O33
Series Statement:
CUDARE Working Paper 857




 Record created 2017-04-01, last modified 2018-01-22

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