Abstract
We hypothesize that the increase in expectation about future technological change decreases the likelihood for the purchase of new assets because the change may make the new assets obsolete. To test this hypothesis, we use patents and citations data to represent the expected technological change. We find that the purchases of and the amount spent on used assets increase with the expectation of technological change, while time to completion of the purchase and the number of bids decrease with the increase in expectations about technological change. We exploit industry deregulations to establish identification. In contrast to the literature, we find no empirical support for financial constraint as a reason for purchasing used assets.