Endogenous local interaction and multi-product firms

Bauke Visser

Journal of Evolutionary Economics, 1999, vol. 9, issue 2, 243-263

Abstract: Multi-product firms are modelled as locally interacting entities that gather information on the profitability of product combinations in an environment defined in terms of their currently supplied markets. They learn from their own past play. Local information gathering may slow down convergence and may prohibit profit rates from becoming equal. Cycles show parts of the economy that are in rest, while others remain in a state of flux. The first two results stem from the endogeneity of the interaction structure, while the third follows from the interplay of learning and information gathering.

Keywords: Multi-product firms; Diversification; Information gathering; Learning (search for similar items in EconPapers)
JEL-codes: C79 D83 L13 (search for similar items in EconPapers)
Date: 1999-05-03
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