Technology Adoption and Externality

• Main Authors: Ta-Cheng Huang, 黃大正
• Other Authors: 李怡庭
• Format: Others
• Language: en_US
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/39120011322689984615

碩士 === 國立臺灣大學 === 經濟學研究所 === 95 === We explicitly consider strategic interaction between agents to study technology adoption and its effects on the prices of technologies,welfare and government policies in a two technologies search-theoretic model. We model the technology market where pioneers can sell technologies to workers, who can implement them, and the goods market where workers can trade their consumption goods produced by the technology. The markets are decentralized with random matching and the prices of technologies are specified exogenously at first and decided by bargaining in the end. The technologies which get adopted and their prices under different equilibia are discussed in the paper. In terms of results, steady-state equilibria were characterized in several versions of the model. For some specified parameters there is a unique steady-state equilibrium; for others there are multiple equilibria. If tuition paid to a technical pioneer agent is specified exogenously,with only one technology adopted by the economy, tuition should be able to cover the present value of adoption cost and should not be so high that an unskilled worker can not afford it. The utility gained from consuming in the goods market should be able to cover the total cost, which is composed of the production cost and the present value of tuition. On the other hand, if all technologies are adopted, the difference between the net gain from imparting the two technologies can not be too large. Likewise, the utility gained from consuming should be able to cover total cost and the expected cost difference. If tuition is determined endogenously, tuition increases with an decrease in the size of workers population or with a decrease in trading friction in the goods market. The arrival rate of technology, however, has an nonlinear effect on tuition. This model also shows that tuition under externality of production cost is higher than not being under it. At last, the government can choose any technology it wants when the government size is big enough. It was determined that the government should implement the demand side policy when trading friction in the goods market is not severe.