Abstract
In the recent literature about the explanation of the behaviour of innovating firms there coexist two basically different approaches. To so calledneoclassical approach assumes maximising behaviour relating to an exogenously given innovation technology and theevolutionary approach postulates time constant routine decisions. Both explanations are supported by well known arguments. Nevertheless they seem to be completely separated in the literature. The evolutionary approach even defines itself by the separation of the neo-classical approach. In this paper the two methods or philosophies are linked in a simple duopolistic model. It will be shown, that the strategic maximising behaviour of innovating firms leads in a dynamic model to routine decisions as equilibrium strategies.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bertsekas, D.P. (1976),Dynamic Programming and Stochastic Control, New York: Ac Press.
Blondki, M. (1993), Die Theorie der Industriestrukturen und deren Veränderungen durch technischen Fortschritt und neue Produkte, Universität Mannheim, Dissertation, unpublished.
Ericson, R. and A. Pakes (1989),An Alternative Theory of Firm and Industry Dynamics, Columbia University Discussion Paper.
Federgruen, A. (1978). ‘On N-Person Stochastic Games with Denumerable State Space’Advances in Applied Probability 10, 452–471.
Nelson, R. and S. Winter (1982),An Evolutionary Theory of Economic Change, Cambridge, Ma: Harvard University Press.
Parthasarathy, T. (1973), ‘Discounted, Positive and Noncooperative Stochastic Games’,International Journal of Game Theory 2, 25–37.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Blonski, M. Innovation and evolution as a dynamic game with rational behaviour. Empirica 20, 147–158 (1993). https://doi.org/10.1007/BF01383978
Issue Date:
DOI: https://doi.org/10.1007/BF01383978