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Publication - Professor Gerard Van den Berg

    Revolutionary effects of new information technologies

    Citation

    van den Berg, GJ, 2006, ‘Revolutionary effects of new information technologies’. Economic Journal, vol 116.

    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 equilibrium. Inefficient production technologies are swiftly moved even in sectors where the new information technology has only recently been introduced. The results apply to consumer products, labour, intermediates and institutions.

    Full details in the University publications repository