A Model of Innovation and Knowledge Development Among Boundedly Rational Rival Firms

26 Pages Posted: 23 Jun 2016

See all articles by Cristina Boari

Cristina Boari

University of Bologna - Department of Economics

Guido Fioretti

University of Bologna

Vincenza Odorici

Department of Management - University of Bologna

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Date Written: June 21, 2016

Abstract

This model explores the consequences of common theoretical hypotheses and empirical stylized facts regarding innovation, knowledge development and knowledge management by geographically clustered rival firms. Our model artificially generates innovations, unknown and unexpected to our artificial decision-makers. Since the set of possibilities is not known a priori to our agents, they cannot apply utility maximization. Bounded rationality enters this model both as behavioural rules of thumb and as cognitive constraints on their application. In this paper, we merely illustrate the structure and the assumptions of our model.

Keywords: Innovation, Uncertainty, Bounded Rationality, Knowledge Development, Learning, Imitation

JEL Classification: C69, D79, D83, E22, L29

Suggested Citation

Boari, Cristina and Fioretti, Guido and Odorici, Vincenza, A Model of Innovation and Knowledge Development Among Boundedly Rational Rival Firms (June 21, 2016). Available at SSRN: https://ssrn.com/abstract=2799554 or http://dx.doi.org/10.2139/ssrn.2799554

Cristina Boari

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Guido Fioretti (Contact Author)

University of Bologna ( email )

Via Capo di Lucca 34
Bologna, 40126
Italy

Vincenza Odorici

Department of Management - University of Bologna ( email )

via Capo di Lucca, 34
Bologna, Bologna 40126
Italy

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