Central Path Dynamics and a Model of Competition. II
AbstractGrowth - the change in number or size - and adaptation - the change in quality or structure - are key attributes of global processes in natural communities, society and economics (see, e.g. Hofbauer and Sigmund, 1988; Freedman, 1991; Young, 1993). In this paper we describe a model with explicit growth-adaptation feedbacks. We treat it in the form of an economic model of competition of two firms (with several departments) on the market. Their size is measured by their capital, and their quality by their productive power (production complexity). It is assumed that the production complexity of a department or firm is a simple function (that is more general than the one considered in Krazhimskii and Stoer, 1999) of its capital. The model works on both the firm level (competition among the departments) and the market level (competition among the firms). The model shows some empirically observable phenomena. Typically, one of the firms will finally cover the market. The winner is not necessarily the firm with the potentially higher maximum productivity. A long-term coexistence of firms may arise in exceptional situations occurring only when the maximum potential productivities (not the actual productivities) are equal. The analysis is also based on the concept of central paths from the interior point optimization theory (see Sonnevend, 1985; and e.g., Ye, 1997).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Institute for Applied Systems Analysis in its series Working Papers with number ir00018.
Date of creation: Mar 2000
Date of revision:
Contact details of provider:
Postal: A-2361 Laxenburg
Web page: http://www.iiasa.ac.at/Publications/Catalog/PUB_ONLINE.html
More information through EDIRC
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
- Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-66, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.