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Myopic selection

journal contribution
posted on 2023-06-08, 19:26 authored by P A Geroski, M Mazzucato
The severity of selection mechanisms and the myopia of selection are explored through a duopoly model where one firm tries to move down a learning curve in which costs are initially higher than its rival's but ultimately much lower. A trade-off is found between catch-up time and asymptotic market share: the more severe are selection pressures, the less likely is it that the learning technology will survive; however, if it does survive, the learning technology will in the limit be more competitive the more severe are selection pressures. We explore the dynamics of the model under unit cost and strategic pricing and find that the optimal pricing rule depends on the parameters governing firm learning and market selection.

History

Publication status

  • Published

Journal

Metroeconomica

ISSN

0026-1386

Publisher

Wiley

Issue

2

Volume

53

Page range

181-199

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2015-01-06

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