Learning-by-doing and the choice of technology: The role of patience

If agents learn by doing and are myopic, less advanced firms might adopt ne w technologies while more advanced firms would stick with the old technolog y. This kind of overtaking can also occur if agents are forward looking and have high discount rates. However, overtaking never occurs if agents are s ufficiently patient. A finite discount rate increases the set of states at which agents adopt new technologies, so more patient agents tend to upgrade their technology more frequently. (C) 2001 Academic Press.