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Industry dynamics in complex product spaces: An evolutionary model

  • Marengo, Luigi
  • Valente, Marco

In this paper we present an evolutionary simulation model of industry dynamics with product innovation and differentiated demand in complex product industries, i.e. industries where products are made of many components, possibly belonging to different technologies, and providing a variety of services to consumers who have heterogeneous preferences. We analyze how the complexity of the product space, the strategies that firms follow to search this space either innovating or imitating, and the differentiation of consumers' preference interact to determine the structure and evolutions of the industry.

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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 21 (2010)
Issue (Month): 1 (March)
Pages: 5-16

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Handle: RePEc:eee:streco:v:21:y:2010:i:1:p:5-16
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  1. Shy, Oz, 1996. "Technology revolutions in the presence of network externalities," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 785-800, October.
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  8. Anderson, Simon P & de Palma, Andre & Thisse, Jacques-Francois, 1989. "Demand for Differentiated Products, Discrete Choice Models, and the Characteristics Approach," Review of Economic Studies, Wiley Blackwell, vol. 56(1), pages 21-35, January.
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