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Recognising investment opportunities at the onset of recoveries

  • Fioretti, Guido

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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Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 60 (2006)
Issue (Month): 2 (June)
Pages: 69-84

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Handle: RePEc:eee:reecon:v:60:y:2006:i:2:p:69-84
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