An industry evolution model incorporating strategic interaction.

摘要

This thesis develops and analyzes an industry evolution model with two homogenous firms and strategic interaction. Firms compete in a market with perfect information. Consumer demands are based on prices, the level of quality. Firms seek to maximize profits by making strategic decisions on production capacity, process efficiency and product competitiveness over a finite planning horizon. The thesis' objectives are twofold. First, we wish to understand the strategic management of R&D investment and capacity expansion. Second, we wish to understand how public policy initiatives affect firm decisions under different economic and technological conditions, and whether such initiatives actually increase social welfare as intended.