Market Structure, Nonconvexities, and Equilibrium Bias of Technology

26 Pages Posted: 28 Nov 2011  

Lorenzo Burlon

Bank of Italy

Date Written: November 27, 2011

Abstract

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

Burlon, Lorenzo, Market Structure, Nonconvexities, and Equilibrium Bias of Technology (November 27, 2011). Available at SSRN: https://ssrn.com/abstract=1965225 or http://dx.doi.org/10.2139/ssrn.1965225

Lorenzo Burlon (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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