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| Author: | Waterman, D. |
| Title: | The effects of technological change on the quality and variety of information products |
| Journal: | Economics of innovation and new technology
2007 : OCT-NOV, VOL. 16:7-8, p. 587-594 |
| Index terms: | technological change information consumption product quality product variety models |
| Language: | eng |
| Abstract: | This article deals with issues of information products, namely TV programs, movies, computer software. It is shown through comparative statics that under reasonable assumptions about consumer demand and production technology, competitive firms in a monopolistically competitive industry are induced to increase first-copy investments as a result of either what is defined as 'quality-enhancing' or 'cost-reducing' types of technological advance, while product variety either falls or stays the same. It is suggested based on results that contrary to expectations, potentially cost-saving technological advances in information industries may result in greater market concentration. |
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