[OPE-L:3492] Re: accumulation: disequilibrium dynamics

Gerald Lev (glevy@pratt.edu)
Sun, 20 Oct 1996 19:52:20 -0700 (PDT)

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Steve K wrote in [OPE-L:3490]:

> The mention of "homogeneous products" below
> is one. If you work at the individual firm level, then IMO you're beholden
> to work with heterogeneous products as well, and define industries by breaks
> in relative elasticities of demand.

The assumption of "homogeneous products" was made to avoid discussing *at
this stage* the process of product differentiation common in oligopolistic
markets where advertising and marketing can serve as a *substitute* for
technical change and price competition by firms (under certain
conditions). The justification for this simplifying assumption would be as
follows: before we consider the form that rivalry takes when there are
oligopolitic markets, we should first consider the case where there are
more competitive markets.

> I think these considerations take us out of the realm of mathematical
> modelling and into computer (evolutionary) modelling.

That may be the case, but isn't that where the "cutting-edge" is currently
re models of technological change?

In Solidarity,