In this paper we consider a class of time discrete intertemporal optimization models in one dimension. We present a technique to construct intertemporal optimization models with nonconcave objective functions, such that the optimal policy function coincides with any pre-specified C2 function....

This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to implement a product innovation. Production capacities of both firms are...

This paper studies the evolution of two clusters of firms competing on a common market. Firms exit and enter a cluster based on the perceived chances for profits inside and outside the cluster. Information about profits are diffused by direct communication between firms. Internal and external...

We consider the impact of local and global spillover effects on the long run market shares of two populations of firms (e.g.~firms based in two different regions) who compete on a high-tech market. Production costs of a firm are (strongly) influenced by the number of local firms and (weakly) by...

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...