Firm entry diversity, resource space heterogeneity and market structure

Abstract

Evolutionary explanations of market structures have usually focused on the selection pressures impacted by a number of factors such as scale economies, niche width, firm size and consumer heterogeneity. How selection processes work in markets is highly dependent on the available firm type variation at entry. In order to explore the implications of different degrees of firm diversity at entry on posterior market selection processes, we develop an agent-based computational model. Results indicate that a proper understanding of market selection processes should, indeed, involve understanding the effects of firm type variation at market entry. © Springer-Verlag Berlin Heidelberg 2011.