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Dynamic Complementarities, Efficiency and Nash Equilibria for Populations of Firms and Workers


  • Elvio Accinelli
  • Silvia London
  • Lionello F. Punzo
  • Edgar J. Sanchez Carrera


We consider an economy with two types of firms (innovative and non-innovative) and two types of workers (skilled and unskilled), where workers' decisions are driven by imitative behavior, and thus the evolution of such an economy depends on the initial distribution of the firms. We show that there exists a continuous of high level steady states and only one low level and asymptotically stable equilibrium. There exists a threshold value on the initial number of firms to be overcome it to located in the basin of attraction of one of the high level equilibrium. We show that in each high level equilibrium there coexists a share of innovative firms with a share of non-innovative firms, and a share of skilled workers (human capital) coexisting with a share of unskilled workers. But if the initial share of innovative firms is lower than the threshold value, then the economy evolves to a low level equilibrium wholly composed by non-innovative firms and unskilled workers. Finally, we characterise the equilibria as the evolutionarily stable strategies against a field.

Suggested Citation

  • Elvio Accinelli & Silvia London & Lionello F. Punzo & Edgar J. Sanchez Carrera, 2010. "Dynamic Complementarities, Efficiency and Nash Equilibria for Populations of Firms and Workers," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(1), pages 90-110.
  • Handle: RePEc:eei:journl:v:53:y:2010:i:1:p:90-110

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    References listed on IDEAS

    1. Apesteguia, Jose & Huck, Steffen & Oechssler, Jorg, 2007. "Imitation--theory and experimental evidence," Journal of Economic Theory, Elsevier, vol. 136(1), pages 217-235, September.
    2. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
    3. Acemoglu, Daron, 1997. "Matching, Heterogeneity, and the Evolution of Income Distribution," Journal of Economic Growth, Springer, vol. 2(1), pages 61-92, March.
    4. Todd Sandler & John Tschirhart, 1997. "Club theory: Thirty years later," Public Choice, Springer, vol. 93(3), pages 335-355, December.
    5. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
    6. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1055-1089.
    7. Schlag, Karl H., 1998. "Why Imitate, and If So, How?, : A Boundedly Rational Approach to Multi-armed Bandits," Journal of Economic Theory, Elsevier, vol. 78(1), pages 130-156, January.
    8. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-846, September.
    9. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
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    Cited by:

    1. Rosas-Martinez, Victor H., 2016. "Towards a Democratization of Knowledge with Topological Emphasis in Economics," MPRA Paper 74746, University Library of Munich, Germany.
    2. Accinelli, Elvio, 2015. "Instituciones, economía clásica y economía evolutiva," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(21), pages 7-26, julio-dic.
    3. Víctor H. ROSAS-MARTINEZ, 2016. "Towards a Democratization of Knowledge with Topological Emphasis in Economics," Journal of Economics Bibliography, KSP Journals, vol. 3(4), pages 602-609, December.
    4. Kancs, d'Artis & Kielyte, Julda, 2010. "European Integration and Labour Migration," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 14, November.
    5. Victor H. ROSAS-MARTINEZ, 2016. "On Behavioral Macroeconomics, Globalization, and Economic Growth," Journal of Economics Bibliography, KSP Journals, vol. 3(3), pages 482-489, September.
    6. d'Artis Kancs, 2011. "Labour migration in the enlarged EU: a new economic geography approach," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 14(2), pages 171-188.
    7. D'Artis Kancs & Pavel Ciaian, 2011. "Modelling the flow of knowledge and human capital: a framework of innovative capital," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 7(1/2/3), pages 134-160.
    8. Accinelli, Elvio & Sanchez Carrera, Edgar J., 2011. "Strategic complementarities between innovative firms and skilled workers: The poverty trap and the policymaker's intervention," Structural Change and Economic Dynamics, Elsevier, vol. 22(1), pages 30-40, February.
    9. James Anderson, 2001. "Migration, FDI, and the Margins of Trade," EERI Research Paper Series EERI_RP_2001_05, Economics and Econometrics Research Institute (EERI), Brussels.

    More about this item


    Imitative Behavior; Poverty Traps; Strategic Complementarities; Two Population Normal Form Game; Threshold Value.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General


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