Cooperation of firms yielding industrial clusters

Abstract

Industrial clusters, exceedingly popular all over the world, play a significant role in economics, and it is very important to further capture them. This paper addresses the formation of industrial clusters with evolutionary game theory techniques. According to evolutionary game theory techniques, cooperation conditions for two firms in two different industries are characterised. Actually, if the evolutionary stable strategy (ESS) is the corporation, an industrial cluster is yielded. We therefore outline the conditions to possibly cooperate in two industries, which give rise to an industrial cluster. This implies the planning practice to encourage the cooperation to establish industrial clusters.