On Vertical Relations and Technology Adoption Timing Maria Alipranti Chrysovalantou Milliou Emmanuel Petrakis ∗ November 2014 Abstract This paper explores how vertical relations influence the timing of new technology adop- tion. It shows that both the bargaining power distribution among the vertically related firms and the contract type through which vertical trading is conducted affect crucially the speed of adoption: the downstream firms can adopt later a new technology when the upstream bargaining power increases as well as when wholesale price contracts, instead of two-part tariffs, are employed. Importantly, it shows that technology adoption can take place earlier when firms obtain their inputs from external suppliers than when they produce them in-house; hence, the presence of vertical relations can accelerate the adoption of a new technology. JEL Classification : L13, O31, L22, L41 Keywords: Technology adoption; vertical relations; two-part tariffs; wholesale price con- tracts; bargaining ∗ Alipranti: Düsseldorf Institute for Competition Economics (DICE), Heinrich-Heine University of Düsseldorf, e-mail: alipranti@dice.hhu.de; Milliou: Department of International and European Economic Studies, Athens University of Economics and Business, e-mail: cmilliou@aueb.gr; Petrakis (corresponding author): Department of Economics, University of Crete, Univ. Campus at Gallos, Rethymnon 74100, Greece, tel: +302831077409, e-mail: petrakis@uoc.gr. This research has been co-financed by the European Union (European Social Fund - ESF) and Greek national funds through the Operational Program "Education and Lifelong Learning" of the National Strategic Reference Framework (NSRF) - Research Funding Program: Thalis - Athens University of Economics and Business - "New Methods in the Analysis of Market Competition: Oligopoly, Networks and Regulation". Full responsibility for all shortcomings is ours.