This note expounds the abstract fundamentals of the appropriability problem, re-assessing insights from three classic contributions – those of Schumpeter, Arrow and Teece. Whereas the first two contributions were explicitly concerned with the implications of appropriability for society at...

As emphasized by Barney (1986), any explanation of superior profitability must account for why the resources supporting such profitability could have been acquired for a price below their rent generating capacity. Building upon the literature in economics on coordination failures and incomplete...

This paper shows how idiosyncratic resources can be the basis of sustained profitability and persistent heterogeneity under competitive conditions: Generic inputs purchased in the market become idiosyncratic resources by investments in customization. Analytically, we show how heterogeneous firms...

Production theory in the neoclassical tradition is strong on Abstract generality. Its high level of Abstraction tends to impede understanding of technological change, partly because its perspective on production differs so much from those of engineers, managers and technologists. A more grounded...

The paper analyses some general dynamic properties of industries characterized by heterogeneous firms and continuing stochastic entry. After a brief critical assessment of some significant drawbacks of recent contributions to modeling of stochastic industrial dynamics, we propose a novel...

This paper offers a sketch of what an economic theory of the firm would look like if it were founded on the thought of Joseph Schumpeter, particularly on Chapters 1-2 of his Theory of Economic Development. Schumpeterian analysis requires an intuitively appealing and realistic conceptualization...

This study presents a new model of search on a “rugged landscape,” which employs modeling techniques from fractal geometry rather than the now-familiar NK modeling technique. In our simulations,firms search locally in a two-dimensional fitness landscape, choosing moves in a way that responds...