Industry Dynamics with Knowledge-Based Competition: A Computational Study of Entry and Exit Patterns

44 Pages Posted: 8 Mar 2009  

Myong-Hun Chang

Cleveland State University - Economics

Date Written: March 5, 2009

Abstract

I propose a computational model of industry evolution capable of matching many stylized facts. It views the firm as a myopic but adaptive entity whose survival depends on its ability to perform various activities with greater efficiency than its rivals. In this model, the shakeout pattern arises naturally in the early stage of industrial development. I provide a full comparative dynamics analysis of how various industry-specific factors determine the numbers and the rates of entries and exits over time as well as the ages of the exiting firms.

Keywords: Industry Dynamics, Shakeouts, Innovation, Imitation, Agent-Based Computational Model

JEL Classification: L10, O30

Suggested Citation

Chang, Myong-Hun, Industry Dynamics with Knowledge-Based Competition: A Computational Study of Entry and Exit Patterns (March 5, 2009). Available at SSRN: https://ssrn.com/abstract=1354333 or http://dx.doi.org/10.2139/ssrn.1354333

Myong-Hun Chang (Contact Author)

Cleveland State University - Economics ( email )

Cleveland, OH
United States

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