We study investments in R&D and the formation of R&D clusters of firms which are competitors in the market. In a three stage game, firms first decide on the budget allocated to their R&D department, then form research clusters and finally compete in quantities. The second stage cluster formation...

This paper presents a numerical method for the characterization of Markov-perfect equilibria of symmetric differential games exhibiting coexisting stable steady-states. The method relying on the calculation of 'local value functions' through collocation in overlapping parts of the state space,...

In this paper we study the behavior of optimal paths in dynamic programming models with a strictly convex return function. Such a model has been investigated in Dawid and Kopel (1997) who assume that the growth of a renewable resource is governed by a piecewise linear function. We prove that in...

This paper explores the idea of using artificial adaptive agents in economic theory. In particular, we use Genetic Algorithms (GAs) to model the learning behavior of a population of adaptive and boundedly rational agents interacting in an economic system. We analyze the behavior of a GA in two...