Coordination Metagame Dynamics Inhibit Emergence of Innovation in Economic Networks
Networks constrain the evolution of their parts. In living cells, any mutation in the metabolic network responsible for growth should not lead to a deterioration in the fitness of the organism in order for it to spread in the population, otherwise it will be selected against by evolution. And since evolution does not plan forward, if two or more mutations need to be present at the same time to shift a network to a higher fitness state, yet any of them occurring individually can deteriorate the fitness of the overall network, then this improved state will largely remain inaccessible. In this paper, we extrapolate the aforementioned concept to economic networks in which a number of firms compete in one or more markets. In such networks, for a new technology to emerge, it has to improve the profit of the firm adopting it. It is shown here, depending on the cost function characterizing the novel production process, it could happen that a number of firms must adopt together a new process or set of processes in order for them to become more profitable. The emergence of the new technology becomes a metagame where firms need to coordinate to overcome the innovation barrier inherent in the network structure
Year of publication: |
[2022]
|
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Authors: | Hashem, I. ; Telen, D. ; Nimmegeers, P. ; van Impe, Jan Frans M. |
Publisher: |
[S.l.] : SSRN |
Subject: | Innovation | Unternehmensnetzwerk | Business network | Soziales Netzwerk | Social network | Netzwerk | Network | Koordination | Coordination | Theorie | Theory | Innovationsmanagement | Innovation management | Technologiepolitik | Technology policy |
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