Technical change and profits: the prisoner's dilemma
By: Baldani, Jeffrey.
Contributor(s): Michl, Thomas R.
Material type:
ArticlePublisher: 2000Description: p.104-18.Subject(s): Technological change | Marxism | Profits
In:
Review of Radical Political EconomicsSummary: We examine the implications of biased-lower marginal, but higher fixed, cost - technical change in a model of oligopoly. Such changes create an incentive for firms to adopt new technologies in a quest for increased output, market share, and profits. These individual incentives lead to a prisoner's dilemma: the increase in firms' outputs causes market price to fall. The analysis specifies conditions under which the decrease in price will result in lower profits for both the individual firms and the industry as a whole. - Reproduced
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Articles
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Indian Institute of Public Administration | Volume no: 32, Issue no: 1 | Available | AR44902 |
We examine the implications of biased-lower marginal, but higher fixed, cost - technical change in a model of oligopoly. Such changes create an incentive for firms to adopt new technologies in a quest for increased output, market share, and profits. These individual incentives lead to a prisoner's dilemma: the increase in firms' outputs causes market price to fall. The analysis specifies conditions under which the decrease in price will result in lower profits for both the individual firms and the industry as a whole. - Reproduced
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