IDEAS home Printed from
   My bibliography  Save this paper

Spillover Effects, Adaptive Learning And Long Run Market Shares


  • Herbert Dawid

    (University of Southern California)

  • M. Kopel

    (Vienna University of Technology)

  • G.-I. Bischi

    (Universita di Urbino)


We consider the impact of local and global spillover effects on the long run market shares of two populations of firms (e.g.~firms based in two different regions) who compete on a high-tech market. Production costs of a firm are (strongly) influenced by the number of local firms and (weakly) by the number of foreign firms in the market. Every period firms in both populations decide whether to exit or enter the market based on information about the profitability of the market compared to an outside option. This information which is spread through Word-of-Mouth communication is noisy. Equilibria and basins of attraction of the resulting market share dynamics are analyzed using the concepts of critical curves. We demonstrate under which conditions the market is entirely taken over by firms from one single population and in how far the long run otucome depends on the initial market shares. The set of initial market conditions where such market takeovers occur neither depends continuously on the parameters of the model nor is a connected set. Rather the size of the basins of attraction of these steady states changes abruptly due to basin bifurcations and might develop into a complex non-connected structure. The characterization of such transitions of the basins of attraction for several parameter variations allows interesting insights into the question which factors are crucial for a population to be able to take over the market. In particular, it is also shown that often improving the ability to import know-how from the other population is more helpful for a market takeover than increasing local spillover effects.

Suggested Citation

  • Herbert Dawid & M. Kopel & G.-I. Bischi, 2000. "Spillover Effects, Adaptive Learning And Long Run Market Shares," Computing in Economics and Finance 2000 191, Society for Computational Economics.
  • Handle: RePEc:sce:scecf0:191

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sce:scecf0:191. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.