Dynamic Model of Market of Patents and Equilibria in Technology Stocks
The paper presents a dynamic model of trading on market of patents. It is assumed that each firm participating in market produces its own technologies, whereas its manufacturing sector utilizes both originally produced technologies and those produced in other firms. The firms are therefore interdependent through the technology stocks used in manufacturing, which provides a basis for the emergence of market of patents. In our model a firm has three actions in market, "prior announcement, offering payoffs, and making decisions." Three-stage trading is repeated periodically and thus drives the evolution of the firms' technology stocks. We show that, under reasonable assumptions, the proposed pattern allows the firms to act so that, first, their individual decisions are subjectively best in every period of trading, and, second, current combinations of their technology stocks gradually approach a state which maximizes the total profit of the firms' community. An important feature of the model is that the described market operations imply the minimum exchange in individual information.
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- Kaniovski Yuri M. & Young H. Peyton, 1995. "Learning Dynamics in Games with Stochastic Perturbations," Games and Economic Behavior, Elsevier, vol. 11(2), pages 330-363, November.
- Watanabe, Chihiro, 1992. "Trends in the substitution of production factors to technology--empirical analysis of the inducing impact of the energy crisis on Japanese industrial," Research Policy, Elsevier, vol. 21(6), pages 481-505, December.
- Smale, Steve, 1980. "The Prisoner's Dilemma and Dynamical Systems Associated to Non-Cooperative Games," Econometrica, Econometric Society, vol. 48(7), pages 1617-34, November.
- Drew Fudenberg & David Kreps, 2010.
"Learning Mixed Equilibria,"
Levine's Working Paper Archive
415, David K. Levine.
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