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Heterogeneity vs. externalities in technological competition: A tale of possible technological landscapes

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  • Jean-Michel Dalle

    ()
    (Ecole Polytechnique & IEPE-CNRS, 59-61, rue Pouchet, F-75017 Paris, France)

Abstract

The article presents a stochastic interaction model based on Gibbs random fields to analyze technological competition in a population of heterogeneous adopters with local or global externalities. The relationships between both heterogeneity and externalities and imperfect and asymmetric information are first emphasized. When local externalities and heterogeneity coexist, the technological landscapes of the industry are then shown to depend on the relative influence of these two parameters, with a phase transition: technologies coexist either in approximately equal market shares when heterogeneity is high enough or with one of the technologies only surviving in technological niches when local externalities dominate. Niches do also spontaneously appear: technological options survive in economic space due to the existence of some amount of heterogeneity among agents. On the contrary, when global externalities are added, pure standardization almost always occurs. We finally argue that different public policies should be designed so as to fit with different technological landscapes.

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Bibliographic Info

Article provided by Springer in its journal Journal of Evolutionary Economics.

Volume (Year): 7 (1997)
Issue (Month): 4 ()
Pages: 395-413

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Handle: RePEc:spr:joevec:v:7:y:1997:i:4:p:395-413

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Related research

Keywords: Externalities ; Heterogeneity ; Local interactions ; Global interactions ; Phase transition ; Standardization ; Stochastic models ; Technological competition ; Technological niches ; Economic landscapes;

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Cited by:
  1. Christian Garavaglia & Franco Malerba & Luigi Orsenigo & Michele Pezzoni, 2010. "A History-Friendly Model of the Evolution of the Pharmaceutical Industry: Technological Regimes and Demand Structure," KITeS Working Papers 036, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Nov 2010.
  2. Pigeard de Almeida Prado, Fernando & Belitsky, Vladimir & Ferreira, Alex Luiz, 2011. "Social interactions, product differentiation and discontinuity of demand," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 642-653.
  3. Deroian, Frederic, 2002. "Formation of social networks and diffusion of innovations," Research Policy, Elsevier, vol. 31(5), pages 835-846, July.
  4. Giovanni Pegoretti & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2012. "An agent-based model of innovation diffusion: network structure and coexistence under different information regimes," Journal of Economic Interaction and Coordination, Springer, vol. 7(2), pages 145-165, October.
  5. Koen Frenken, 2006. "Technological innovation and complexity theory," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 137-155.
  6. Jean-Michel Dalle & Paul A. David, 2005. "SimCode: Agent-based Simulation Modelling of Open-Source Software Development," Industrial Organization 0502008, EconWPA.
  7. Daron Acemoglu, 2011. "Diversity and Technological Progress," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 319-356 National Bureau of Economic Research, Inc.
  8. Christian Garavaglia & Franco Malerba & Luigi Orsenigo & Michele Pezzoni, 2012. "Technological regimes and demand structure in the evolution of the pharmaceutical industry," Journal of Evolutionary Economics, Springer, vol. 22(4), pages 677-709, September.
  9. Jean-Michel Dalle & Paul A. David, 2005. "Simulating Code Growth in Libre (Open-Source) Mode," Discussion Papers 04-002, Stanford Institute for Economic Policy Research.
  10. Kindler, A. & Solomon, S. & Stauffer, D., 2013. "Peer-to-peer and mass communication effect on opinion shifts," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(4), pages 785-796.
  11. Albert Faber & Koen Frenken, 2008. "Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics," Innovation Studies Utrecht (ISU) working paper series 08-15, Utrecht University, Department of Innovation Studies, revised Apr 2008.
  12. Frenken, Koen, 2000. "A complexity approach to innovation networks. The case of the aircraft industry (1909-1997)," Research Policy, Elsevier, vol. 29(2), pages 257-272, February.
  13. Jean-Michel Dalle & Paul A. David, 2007. "“It Takes All Kinds”: A Simulation Modeling Perspective on Motivation and Coordination in Libre Software Development Projects," Discussion Papers 07-024, Stanford Institute for Economic Policy Research.
  14. Andreas Reinstaller, 2013. "An evolutionary view on social innovation and the process of economic change," WWWforEurope Working Papers series 43, WWWforEurope.

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