The existence of costs to consumers to switch between products is central to the process by which firms set prices. Their effect on the introduction and diffusion of innovative technologies is not by now well understood, however. This paper aims to study this effect based on evidence in the...

Summary The paper demonstrates the compatibility between competition as a rivalry among firms and increasing returns resulting from innovative choice. The analysis offers the prospect of a general theory of economic evolution. It is carried out by means of a model, which makes it possible to...