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Competition and the Evolution of Market Structure in the E-conomy : A Simulation Analysis

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  • Friedrich, B. Cornelia

Abstract

In this paper an evolutionary simulation model, based on replicator dynamics, is developed. The purpose is to identify changes in the patterns of evolution of the market structure caused by Information and Communication Technologies (ICT) in the E-conomy in comparison to the Old Economy (without ICT). The relationship between the two economy concepts can be summed up from an industrial organization point of view with the help of stylized facts about the evolution of the market structure as phases in an industrial life cycle. The simulation results show that economic development progresses from the E-conomy to the (next) Old Economy.

Suggested Citation

  • Friedrich, B. Cornelia, 2004. "Competition and the Evolution of Market Structure in the E-conomy : A Simulation Analysis," Dresden Discussion Paper Series in Economics 02/04, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    • Handle: RePEc:zbw:tuddps:0204
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    References listed on IDEAS

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    1. MartinNeil Baily & Robert Z. Lawrence, 2001. "Do We Have a New E-conomy?," American Economic Review, American Economic Association, vol. 91(2), pages 308-312, May.
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    3. Jovanovic, Boyan & MacDonald, Glenn M, 1994. "The Life Cycle of a Competitive Industry," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 322-347, April.
    4. Uwe Cantner & Horst Hanusch, 1998. "Industrie-Evolution," Discussion Paper Series 177, Universitaet Augsburg, Institute for Economics.
    5. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    6. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, December.
    7. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    8. Franco Malerba & Richard Nelson & Luigi Orsenigo & Sidney G. Winter, 2001. "History-Friendly Models: an Overview of the Case of the Computer Industry," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 4(3), pages 1-6.
    9. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
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    Cited by:

    1. Blum, Ulrich & Gleißner, Werner & Leibbrand, Frank, 2005. "Stochastische Unternehmensmodelle als Kern innovativer Ratingsysteme," IWH Discussion Papers 6/2005, Halle Institute for Economic Research (IWH).

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    More about this item

    Keywords

    Industrial life cycle; ICT; Evolution of market structure; Replicator dynamics; Simulation analysis;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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