We model a situation in which agents must choose between two technologies that operate under local, positive network externalities. We find that decentralized behaviour can lead to the emergence of a technical standard, but can also result in a variety of other equilibria. Policy to eliminate...

This paper is concerned with clustering in demand. We present a discrete choice model of consumption that incorporates habit formation and information exchange among consumers in fixed social networks. We provide an analytical solution to a special case of the model by using technical tools from...

Counterfactual conditional statements are ubiquitous in any scientific endeavour. This paper contains an analysis of the nature of counterfactual conditionals and the conditions under which they are considered assertable by scientists. The paper then applies this analysis to the use of...

Theoretical literature on the economics of technology has emphasized the effects on technological trajectories of positive feedbacks. In a competition among technologies that all perform a similar function, the presence of increasing returns to adoptions can force all but one technology from the...

This paper analyzes empirically the channels through which university research affects industry innovation. We examine how the opening of new science, medicine and engineering departments in Italy during 1985-2000 affected regional innovation systems. We find that creation of a new univer- sity...

Empirical analyses of research and development find strong evidence that these activities tend to cluster geographically. Clusters are thought to emerge from the presence of localized positive externalities. This paper presents a model of this clustering behaviour. We find that phase changes in...

We model knowledge diffusion as agents exchanging ideas through a barter process. The model builds on empirical observations of informal knowledge trading among competing agents. The process takes place on a network substrate in which agents are nodes, and can trade only with those to whom they...