CantnerSavinVannuccini2019ReplicatorValueChains_accepted.pdf (871.66 kB)
Replicator dynamics in value chains: explaining some puzzles of market selection
journal contribution
posted on 2023-06-09, 16:28 authored by Uwe Cantner, Ivan Savin, Simone VannucciniThe pure model of replicator dynamics provides important insights in the evolution of markets but has not met with much empirical support. This article extends the model to the case of firms vertically integrated into value chains (VCs). Through an extended analytical model and numerical simulations, we show that (i) by taking VCs into account, the replicator dynamics may reverse its effect. In these ”regressive developments” of market selection, firms with low fitness expand because of being integrated with highly fit partners, and the other way around; (ii) allowing a partner’s switching re-introduces selection forces into the upper layers of VCs; and (iii) periods of instability in the early stage of the industry life cycle may be the result of an optimization’ of partners within a value chain, thus providing a novel and simple explanation of the evidence discussed earlier in the literature.
History
Publication status
- Published
File Version
- Accepted version
Journal
Industrial and Corporate ChangeISSN
0960-6491Publisher
Oxford University PressExternal DOI
Issue
3Volume
28Page range
589-611Department affiliated with
- SPRU - Science Policy Research Unit Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2019-01-10First Open Access (FOA) Date
2021-01-02First Compliant Deposit (FCD) Date
2019-01-09Usage metrics
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