Learning from Own and Foreign Experience: Technological Adaptation by Imitating Firms

B. Bullnheimer, H. Dawid () and R. Zeller
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B. Bullnheimer: University of Vienna
H. Dawid: University of Vienna
R. Zeller: University of Vienna

Computational and Mathematical Organization Theory, 1998, vol. 4, issue 3, No 3, 267-282

Abstract: Abstract In this paper we study the adaptive behavior of firms which repeatedly have to make a production decision. In a single good market the firms use own experience as well as information gathered by observing competitors to iteratively choose a production technology out of a given set. The adaptive learning of the firms is described in a dynamic model and analyzed in a simulation framework. We show that a small but positive propensity to imitate is optimal for the firms and yields production efficiencies above 95% of the maximal value. Furthermore, we observe that in a competitive situation firms using optimal propensities to imitate outmatch pure imitators and nonimitators in production efficiency as well as in profits.

Keywords: technological choice; adaptive behavior; organizational learning; imitation; markets (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1023/A:1009680612160

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