Market Structure, Nonconvexities, and Equilibrium Bias of Technology
26 Pages Posted: 28 Nov 2011
Date Written: November 27, 2011
As a consequence of a technological change, the productivity of a factor may increase even when its supply increases. In this paper we analyze the determinants of this technological bias. We present a general equilibrium model, where a good is produced in the final sector using both a factor and a technology, and the technology is produced in the intermediate sector. We allow for different market structures in the intermediate sector, and we prove that both competition and a variable set of technology producers may affect the occurrence of the technological bias, since they affect the necessary nonconvexities in the equilibrium allocation.
Keywords: Technological Bias, Market Structure, Nonconvexities
JEL Classification: L16, O33
Suggested Citation: Suggested Citation