Markov-perfect industrial dynamics with technological path dependence
AbstractA game-theoretic intertemporal model of industrial competition is proposed where firms choose their optimal technological strategies as part of some (Markov Perfect) equilibrium with potential entry and exit. The main novel feature of the approach is that technological change is modelled along a directed graph of technologies, which permits a rigorous consideration of key issues such as technological gaps, switching costs and gradual innovation. The paper provides some sufficient conditions for existence and ergodicity of the equilibrium, partially studies the induced population dynamics, and explores a number of other issues by means of numerical simulations.
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Bibliographic InfoArticle provided by Springer in its journal Spanish Economic Review.
Volume (Year): 1 (1999)
Issue (Month): 1 ()
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Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
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