Paper Info
Title
The tragedy of product homogeneity and knowledge non-spillovers: explaining the slow pace of energy technological progress.
Abstract
There is a growing body of literature mentioning the slow progress of energy technological innovation as compared to information technology (IT), but the reasons why the energy sector is perplexed by slow innovation remain unexplained. Based on a variety-expanding endogenous technological change model, this paper investigates the economic mechanism that underlines the slow pace of energy technological progress. We show that in the market equilibrium the growth rate of energy technology variety is always lower than that of IT variety, this outcome stems from both the market fundamentals where the homogeneity of end-use energy goods is less likely to harness the pecuniary externality embedded in the love-for-variety household, and the technology fundamentals where capital-intensiveness of energy technology assets inhibits the non-pecuniary technological externality associated with knowledge spillovers. We further show that the social planner allocation can raise the rate of technological progress in both energy and IT sectors, but still fails to achieve an outcome in which technological progress in the energy sector can catch up with the IT sector. Finally, using efficiency-improving revenue-neutral policy interventions that subsidize energy sectors and tax IT sectors, the decentralized market equilibrium can achieve an outcome in which both energy and IT sectors have the same rate of technological progress.
Year
DOI
Venue
2017
10.1007/s10479-016-2144-1
Annals OR
Keywords
Field
DocType
Energy technological innovation, Product homogeneity, Knowledge spillovers, Love-for-variety effect, Q55, Q58, Q41, Q43, Q48, O31
Subsidy,Mathematical optimization,Pace,Economics,Information technology,International trade,Social planner,Technological change,Externality,Industrial organization,Energy technology,Pecuniary externality
Journal
Volume
Issue
ISSN
255
1-2
1572-9338
Citations 
PageRank 
References 
0
0.34
0
Authors
2
Name
Order
Citations
PageRank
Wei Jin18325.25
ZhongXiang Zhang200.68