Connecting adaptive behaviour and expectations in models of innovation: The Potential Role of Artificial Neural Networks

In this methodological work I explore the possibility of explicitly modelling expectations conditioning the R&D decisions of firms. In order to isolate this problem from the controversies of cognitive science, I propose a black box strategy through the concept of “internal model”. The last part of the article uses artificial neural networks to model the expectations of firms in a model of industry dynamics based on Nelson & Winter (1982)

Neo-Schumpeterian Simulation Models

The use of simulation modelling techniques by neo-Schumpeterian economists dates back to Nelson and Winter’s 1982 book “An Evolutionary Theory of Economic Change”, and has rapidly expanded ever since. This paper considers the way in which successive generations of models have extended the boundaries of research (both with respect to the range of phenomena considered and the different dimensions of innovation that are considered), and while simultaneously introducing novel modelling techniques. At the same time, the paper will highlight the distinct set of features that have emerged in these neo-Schumpeterian models, and which set them apart from the models developed by other schools. In particular, they share a distinct view about the type of world in which real economic agents operate, and a invariably contain a generic set of algorithms. In addition to reviewing past models, the paper considers a number of pressing issues that remain unresolved and which modellers will need to address in future. Notable amongst these are the methodological relationship between empirical studies and simulation (e.g. ‘history friendly modelling’), the development of common standards for sensitivity analysis, and the need to further extend the boundaries of research in order to consider important aspects of innovation and technical change.macroeconomics ;

Two-Stage Multi-Objective Meta-Heuristics for Environmental and Cost-Optimal Energy Refurbishment at District Level

Energy efficiency and environmental performance optimization at the district level are following an upward trend mostly triggered by minimizing the Global Warming Potential (GWP) to 20% by 2020 and 40% by 2030 settled by the European Union (EU) compared with 1990 levels. This paper advances over the state of the art by proposing two novel multi-objective algorithms, named Non-dominated Sorting Genetic Algorithm (NSGA-II) and Multi-Objective Harmony Search (MOHS), aimed at achieving cost-effective energy refurbishment scenarios and allowing at district level the decision-making procedure. This challenge is not trivial since the optimisation process must provide feasible solutions for a simultaneous environmental and economic assessment at district scale taking into consideration highly demanding real-based constraints regarding district and buildings’ specific requirements. Consequently, in this paper, a two-stage optimization methodology is proposed in order to reduce the energy demand and fossil fuel consumption with an affordable investment cost at building level and minimize the total payback time while minimizing the GWP at district level. Aimed at demonstrating the effectiveness of the proposed two-stage multi-objective approaches, this work presents simulation results at two real district case studies in Donostia-San Sebastian (Spain) for which up to a 30% of reduction of GWP at district level is obtained for a Payback Time (PT) of 2–3 years.Part of this work has been developed from results obtained during the H2020 “Optimised Energy Efficient Design Platform for Refurbishment at District Level” (OptEEmAL) project, Grant No. 680676

Simulation models of technological innovation: A Review

The use of simulation modelling techniques in studies of technological innovation dates back to Nelson and Winter''s 1982 book "An Evolutionary Theory of Economic Change" and is an area which has been steadily expanding ever since. Four main issues are identified in reviewing the key contributions that have been made to this burgeoning literature. Firstly, a key driver in the construction of computer simulations has been the desire to develop more complicated theoretical models capable of dealing with the complex phenomena characteristic of technological innovation. Secondly, no single model captures all of the dimensions and stylised facts of innovative learning. Indeed this paper argues that one can usefully distinguish between the various contributions according to the particular dimensions of the learning process which they explore. To this end the paper develops a taxonomy which usefully distinguishes between these dimensions and also clarifies the quite different perspectives underpinning the contributions made by mainstream economists and non-mainstream, neo-Schumpeterian economists. This brings us to a third point highlighted in the paper. The character of simulation models which are developed are heavily influenced by the generic research questions of these different schools of thought. Finally, attention is drawn to an important distinction between the process of learning and adaptation within a static environment, and dynamic environments in which the introduction of new artefacts and patterns of behaviour change the selective pressure faced by agents. We show that modellers choosing to explore one or other of these settings reveal their quite different conceptual understandings of "technological innovation".economics of technology ;

Economic and environmental strategies for process design

This paper first addresses the definition of various objectives involved in eco-efficient processes, taking simultaneously into account ecological and economic considerations. The environmental aspect at the preliminary design phase of chemical processes is quantified by using a set of metrics or indicators following the guidelines of sustainability concepts proposed by . The resulting multiobjective problem is solved by a genetic algorithm following an improved variant of the so-called NSGA II algorithm. A key point for evaluating environmental burdens is the use of the package ARIANE™, a decision support tool dedicated to the management of plants utilities (steam, electricity, hot water, etc.) and pollutants (CO2, SO2, NO, etc.), implemented here both to compute the primary energy requirements of the process and to quantify its pollutant emissions. The well-known benchmark process for hydrodealkylation (HDA) of toluene to produce benzene, revisited here in a multiobjective optimization way, is used to illustrate the approach for finding eco-friendly and cost-effective designs. Preliminary biobjective studies are carried out for eliminating redundant environmental objectives. The trade-off between economic and environmental objectives is illustrated through Pareto curves. In order to aid decision making among the various alternatives that can be generated after this step, a synthetic evaluation method, based on the so-called Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) (), has been first used. Another simple procedure named FUCA has also been implemented and shown its efficiency vs. TOPSIS. Two scenarios are studied; in the former, the goal is to find the best trade-off between economic and ecological aspects while the latter case aims at defining the best compromise between economic and more strict environmental impact

PRODUCT STRATEGIES AND STARTUPS’ SURVIVAL IN TURBULENT INDUSTRIES: EVIDENCE FROM THE SECURITY SOFTWARE INDUSTRY

This paper seeks to explore the drivers of startups’ survival in turbulent industries, characterized by high rates of entry and exit, fragmented market shares, and a rapid pace of product innovation. Specifically, the paper aims to underscore the role played by post-entry product strategies, along with their interaction, beyond that of pre-entry conditions. Based on a sample of 270 startups that entered the Security Software Industry from 1989 till 1998, we find evidence that surviving entities are those that more aggressively adopt versioning and product portfolio strategies. Interesting enough, strategic learning seems to play a major role: Focusing on one of the two product strategies commands a higher survival probability than adopting a mixed strategy.

Road Pricing with Autonomous Links

This research examines road pricing on a network of autonomous highway links. By autonomous it is meant that the links are competitive and independent, with the objective of maximizing their own profits without regard for either social welfare or the profits of other links. The principal goal of the research is to understand the implications of adoption of road pricing and privatization on social welfare and the distribution of gains and losses. The specific pricing strategies of autonomous links are evaluated first under the condition of competition for simple networks. An agent-based modeling system is developed which integrates an equilibrated travel demand, route choice, and travel time model with a repeated game of autonomous links setting prices to maximize profit. The levels of profit, welfare consequences, and potential cooperative arrangements undertaken by autonomous links will be evaluated. By studying how such an economic system may behave under various circumstances, the effectiveness of road pricing and road privatization as public policy can be assessed.Network dynamics, road pricing, autonomous links, privatization, agent-based transportation model

Regional Economic Policy: Structured Approach and Tools (The Oretical Formulation

The subject matter of the article is the development of a doctrine of coordinated regional development and the study of the structural quality of development of regional systems based on the theoretical analysis of institutional factors (parameters) that determine the technological efficiency of the regional economy. The purpose is to show possibilities of technological changes and the shift of economic growth in a particular regional system, with strict limits for accelerated development, with emphasis on industrial regions. For this purpose, we generated a number of structural models, analyzed the impact of technological factors on parameters of growth of the regional economy and determined conditions for development of industrial regions. We applied correlative and regression analysis to establish a statistically significant correlation between relevant parameters, used econometric models to show the possibility to estimate parameters of growth through control parameters, including technological factor. The structural aspect of regional economic growth is measured by dividing investments into two classes: old and new technologies. It is possible to increase the technological efficiency of the regional economy by improving results with regard to used (old) technologies and applying new technologies. This approach fundamentally refines the priority queue algorithm for regional development, provides a choice of a strategy of regional technological development. When resources are directed only to the latest technologies, the disproportion in development of the regional economic system can dramatically increase, and parameters related to diversion of resources and creation of a new resource will determine the growth rate of the region. The behavior of investment in old technologies has a major impact on the rate of regional economic growth in Russia, while investments in new technologies are minor and did not have an equivalent impact on the economic growth rate compared with old technologies. Institutional corrections that define parameters of resource diversion from old technologies and creation of a new resource for development, will determine the quality of new economic growth