J. Debenham and S. Simoff (Australia)
Economic simulation. Evolutionary mechanisms.
A general simulation model of market competition is de
veloped to explore the effectiveness of and interactions be
tween different types product exploration and exploitation
strategies i.e. innovation, imitation and process improve
ment. The model, like real markets, is highly non-linear
such that analytical solutions are not possible. We use sim
ulation experiments to examine ﬁrm survival and the effec
tiveness of different strategy mixes and show how these.
depend on the length of time it takes for each strategy to
bear fruit, the speed of new product diffusion and the du
ration of product life cycles. The model is freely available
on the Internet and provides the basis for further experi
ments to examine the impact of different combinations of
ﬁrm strategies on survival and performance.