Abstract
An agent-based model is developed to address the relationship between the ownership structure of an enterprise and the evolution of its product portfolio. The coherence and evolution of a product portfolio is operationalized by transition rules regarding the Moore environment. The distinguishing feature of a cooperative is the single origin constraint according to Cook (1997), which is modelled as a cooperative assigning an infinite lifetime to the first product in its product portfolio, while all other products have finite lifetime. All products of an investor-owned firm (IOF) are assumed to have finite lifetime. Our simulation results show that the single origin constraint pulls the activities of the cooperative in one cluster centered around the first activity, while the IOF’s product portfolio develops in a centrifugal way. The cooperative and the IOF are more diversified in a mixed duopoly.
Selected portions of this chapter have previously appeared in Deng (2015).
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Notes
- 1.
Modifications of the transition rule allow to incorporate additional aspects of cooperatives versus IOFs.
- 2.
Notice that the randomness entails that a divested product can be chosen again by the agent when it is in the neighborhood of the products in the Product Portfolio.
- 3.
This example is adapted from the example in Hendrikse et al. (2007, p. 427).
- 4.
The source code of the simulation models in this paper is available online at: http://hdl.handle.net/1765/77449
- 5.
The choice of 500 periods is sufficiently large compared to the lifetime 40 in order to have a clear pattern in the evolution of the product portfolio.
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Deng, W., Hendrikse, G.W. (2023). On the Evolution of Product Portfolio of Cooperatives versus IOFs: An Agent-Based Analysis of the Single Origin Constraint. In: Hendrikse, G.W., Cliquet, G., Hajdini, I., Raha, A., Windsperger, J. (eds) Networks in International Business. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-031-18134-4_3
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