This article presents a static game theoretic model of a firm's decision to adopt a technological innovation of uncertain profitability. Given the levels of adoption costs, discount rates, and expectations regarding the profitability of the innovation, we determine the (Nash equilibrium) range...

This article shows that if the value of adopting a cost-reducing, capital-embodied process innovation declines with the number of firms which have already adopted it, then the firms adopt the new technology in sequence so that it is "diffused" into the industry over time. This diffusion is due...