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Recognizing Investment Opportunities at the Onset of Recoveries

  • Guido Fioretti

    ()

    (University of Siena, Centro Sistemi Complessi)

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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Paper provided by Society for Computational Economics in its series Modeling, Computing, and Mastering Complexity 2003 with number 07.

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Handle: RePEc:sce:cplx03:07
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