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Network Formation and Strategic Firm Behaviour to Explore and Exploit

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  • Müge Özman

Abstract

The aim of this paper is to investigate the effect of technological opportunities and knowledge tacitness on inter-firm network formation, under two different industry regimes. In the first regime environment is stable and the aim of firms is to exploit knowledge. In this case, they attribute more value to repeated interactions with geographically close firms. In the second regime, there is environmental turbulence, which increases the value of access to novelties from distant partners for the purpose of exploration. The question addressed is, under these regimes how do technological opportunities and knowledge tacitness influence structure of networks? A simulation model is carried out where firms select partners and learn from them, which further shapes their selection process. How the macro structure of the network is shaped from the individual partner selection decisions of firms is analysed. The results reveal that in both regimes richer technological opportunities and higher tacitness generates local and global star firms depending on the parameter range.

Suggested Citation

  • Müge Özman, 2007. "Network Formation and Strategic Firm Behaviour to Explore and Exploit," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 11(1), pages 1-7.
    • Handle: RePEc:jas:jasssj:2007-9-2
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    2. Luca Iandoli & Elio Marchione & Cristina Ponsiglione & Giuseppe Zollo, 2014. "Knowledge sharing and network emergence in small firm clusters: an agent-based model of industrial districts," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Agglomeration, Clusters and Entrepreneurship, chapter 4, pages 66-84, Edward Elgar Publishing.
    3. Sofia Pessoa e Costa & Stéphane Robin, 2007. "The Impact Of Training Programmes On Wages In France: An Evaluation Of The “Qualifying Contract” Using Propensity Scores," Working Papers of BETA 2007-18, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Gisèle Umbhauer, 2007. "De l’amiante au chrysotile, un glissement stratégique dans la désinformation," Working Papers of BETA 2007-15, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Li Qin & Eleftherios Spyromitros & Moïse Sidiropoulos, 2007. "Monetary Policy with Uncertain Central Bank Preferences for Robustness," Working Papers of BETA 2007-23, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    6. Luca Iandoli & Cristina Ponsiglione & Elio Marchione & Giuseppe Zollo, 2012. "Knowledge exchange processes in Industrial Districts and the emergence of networks," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 20(2), pages 231-250, June.

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