Abstract
During the last decade several authors have analyzed the question: Under what conditions does the law of greater productivity of roundabout methods bring about a positive rate of interest5 using elements of BÖHM-BAWERK’s Theory of Interest, and of SCHUMPETER’s Theory of Innovation? All their models, however, assume either that there is one decision unit, namely a central planning agency, or that perfect competition exists. These simplifying assumptions eliminate all the phenomena which are connected with the strategic influence of other agents on the profitability of a specific production method. For this profitability of a specific production method may well depend on the number of producers who have chosen this method. Here we want to give up these simplifying assumptions and include — what is often called — the oligopolistic or strategic interdependence of producers.6
We are grateful to GUNTER STEPHAN for many very helpful and valuable comments and Winfrid REISS for computational assistance.
Reprinted from: Games, Economic Dynamics, and Time Series Analysis, 1982, Physica-Verlag, Wien-Würzburg.
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Böge, W., Faber, M., Güth, W. (1986). A Dynamic Game with Macroeconomic Investment Decisions Under Alternative Market Structures. In: Faber, M. (eds) Studies in Austrian Capital Theory, Investment and Time. Lecture Notes in Economics and Mathematical Systems, vol 277. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-51701-3_15
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DOI: https://doi.org/10.1007/978-3-642-51701-3_15
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