Abstract
An exhaustive comparative statics analysis of a general price taking cost-minimizing model of the firm operating under the influence of price-induced technical progress is carried out from a dual vista. The resulting refutable implications are observable and thus amenable to empirical verification, and take on the form of a symmetric and negative semidefinite matrix. Using data from individual cotton gins in California’s San Joaquin Valley, we empirically test the complete set of implications of the price-induced technical progress theory using both classical and Bayesian statistical procedures. We find that the data are fully consistent with the atemporal, cost-minimizing, price-induced microeconomic theory of technical progress.
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Caputo, M.R., Paris, Q. An Atemporal Microeconomic Theory and an Empirical Test of Price-Induced Technical Progress. J Prod Anal 24, 259–281 (2005). https://doi.org/10.1007/s11123-005-4934-3
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DOI: https://doi.org/10.1007/s11123-005-4934-3