NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Diversity and Technological Progress

Daron Acemoglu

NBER Working Paper No. 16984
Issued in April 2011
NBER Program(s):   EFG

This paper proposes a tractable model to study the equilibrium diversity of technological progress and shows that equilibrium technological progress may exhibit too little diversity (too much conformity), in particular, foregoing socially beneficial investments in “alternative” technologies that will be used at some point in the future. The presence of future innovations that will replace current innovations imply that social benefits from innovation are not fully internalized. As a consequence, the market favors technologies that generate current gains relative to those that will bear fruit in the future; current innovations in research lines that will be profitable in the future are discouraged because current innovations are typically followed by further innovations before they can be profitably marketed. A social planner would choose a more diverse research portfolio and would induce a higher growth rate than the equilibrium allocation. The diversity of researchers is a partial (imperfect) remedy against the misallocation induced by the market. Researchers with different interests, competences or ideas may choose non-profit maximizing and thus more diverse research portfolios, indirectly contributing to economic growth.

download in pdf format
   (273 K)

email paper

This paper is available as PDF (273 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16984

Published: Diversity and Technological Progress, Daron Acemoglu. in The Rate and Direction of Inventive Activity Revisited, Lerner and Stern. 2012

Users who downloaded this paper also downloaded these:
Acemoglu and Autor w17820 What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology
Acemoglu and Autor w16082 Skills, Tasks and Technologies: Implications for Employment and Earnings
Acemoglu w14809 When Does Labor Scarcity Encourage Innovation?
Acemoglu and Jackson w17066 History, Expectations, and Leadership in the Evolution of Social Norms
Acemoglu, Aghion, Bursztyn, and Hemous w15451 The Environment and Directed Technical Change
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us