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

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.