*Revolutionary Effects of New Information Technologies

19 Pages Posted: 8 May 2006

See all articles by Gerard J. van den Berg

Gerard J. van den Berg

VU University Amsterdam - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Tinbergen Institute

Date Written: 0000

Abstract

In markets with imperfect information and heterogeneity, the information technology affects the rate at which agents meet, which affects the distribution of production technologies across firms. Multiple equilibria may arise because the reservation utility and the lowest production technology in use affect each other. The adoption of novel information technologies may then entail a revolution in the sense of a move from an inefficient to an efficient equilibrium. Inefficient production technologies are swiftly removed even in sectors where the new information technology has only recently been introduced. The results apply to consumer products, labour, intermediates and institutions.

Suggested Citation

van den Berg, Gerard J., *Revolutionary Effects of New Information Technologies (0000). The Economic Journal, Vol. 116, pp. F10-F28, February 2006. Available at SSRN: https://ssrn.com/abstract=882159 or http://dx.doi.org/10.1111/j.1468-0297.2006.01062.x

Gerard J. Van den Berg (Contact Author)

VU University Amsterdam - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Tinbergen Institute

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