TITLE:
Innovation Clusters Effects on Adoption of a General Purpose Technology under Uncertainty
AUTHORS:
B. G. Jean Jacques Iritié
KEYWORDS:
Innovation Clusters, General Purpose Technology, Technological Complementarity, Technology Adoption, Uncertainty, Critical Mass
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.14,
October
20,
2018
ABSTRACT: This paper analyzes the
effect of innovation clusters on the adoption of a general purpose technology
(GPT) and on firms R&D investment levels in imperfect information
situation. We developed a theoretical model of vertical relation, described as
a four-step game between an upstream firm providing innovative GPT and an
innovative downstream associated sector, integrator of this technology. The
downstream sector ignores the quality of the GPT and we model the innovation
cluster as a coordination mode of firms, improving the probability of the
downstream firm to receive information about the quality of the GPT technology.
Then, we determine firms equilibria (i.e. prices and technological qualities) and we showed that the effect of innovation
clusters on the choice of qualities, the adoption behavior, levels of R&D
investment as well as that social welfare depends on the quality of R&D
activities carried out before the establishment of the clusters and a threshold
effect (i.e. cluster critical mass);
if the critical mass in terms of information sharing and interaction is not
reached, the cluster may have negative effects. In other words, the consensual
idea of expected positive effects of innovation clusters must be put into
perspective.