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On positional consumption and technological innovation: an agent-based model

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  • João Bernardino
  • Tanya Araújo

Abstract

Positional behaviour is arguably a source of social externalities. Remedies for this market failure are defended by some authors and rejected by others. One of the issues discussed is the role that the competition for positional goods may have in generating technological innovation. This article aims to contribute to the understanding of the dynamics of this process through the use of an agent-based model. Simulations show a plausible dynamics of the process of technological innovation as generated by consumption of positional nature. An interpretation of the results in the scope of the policy discussion in question is provided. The influence of key factors such as income inequality, the materialization of the Hirsch conjecture, and characteristics of the network of relative preferences, is analised. We also frame the potential interest of positional consumption and this model in particular in the context of the ongoing discussion among evolutionary economists on the behaviour of demand. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • João Bernardino & Tanya Araújo, 2013. "On positional consumption and technological innovation: an agent-based model," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1047-1071, November.
    • Handle: RePEc:spr:joevec:v:23:y:2013:i:5:p:1047-1071
    DOI: 10.1007/s00191-013-0317-5
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    References listed on IDEAS

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    Cited by:

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    2. Reto Foellmi & Josef Zweimüller, 2017. "Is inequality harmful for innovation and growth? Price versus market size effects," Journal of Evolutionary Economics, Springer, vol. 27(2), pages 359-378, April.
    3. Florian Chávez-Juárez, 2017. "On the Role of Agent-based Modeling in the Theory of Development Economics," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 713-730, August.

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    More about this item

    Keywords

    Positional consumption; Relative preferences; Innovation; Agent-based modelling; Demand behaviour; Evolutionary economics; Economic inequality; Hirsch conjecture; Social network effects; D01; D11; O31; C63;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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