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Recognizing Investment Opportunities at the Onset of Recoveries

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  • Guido Fioretti

    ()
    (University of Siena, Centro Sistemi Complessi)

Abstract

Investment decision-making is modeled by means of a Kohonen neural net, whose neurons represent firms as decision-makers. Thus, the network reconstructs collective decision-making by the productive system. This model focuses on the decision to invest in novel fields of activity, which requires that managers recognize the emergence of a new technological pattern. Recognizing the value of information is not obvious, since it depends on a firm's mental categories. For instance, in 1964 Olivetti sold its electronics division in the firm belief, well supported by a tradition of excellence in mechanics, that computers would never substitute typing machines.

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Paper provided by Society for Computational Economics in its series Modeling, Computing, and Mastering Complexity 2003 with number 07.

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Handle: RePEc:sce:cplx03:07

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Web page: http://zai.ini.unizh.ch/complexity2003/
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Keywords: Investment; Innovation; Accelerator; Neural Networks; Cognition; Mental Categories;

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Cited by:
  1. Fioretti, Guido, 2007. "The production function," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 374(2), pages 707-714.
  2. Guido Fioretti, 2005. "The Production Function," Papers physics/0511191, arXiv.org.

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