I'm trying to create a NETLOGO model of firms in a market and their decisions on whether to specialize or not. I find that it is a lot more difficult than I thought it would be. For example, trying to capture their utility for specializing is not that straightforward. When they specialize, the size of the market they are addressing falls, but the amount they can charge could increase, due to lesser competition.

I'm 90% new to economics, so I have no idea where to even start with trying to analyze the situation. Any discussion and/or pointers to resources on the web would be of great help!

  • $\begingroup$ Have you read some advanced topics, like mechanism design, contract theory, etc.? $\endgroup$ – superhulk Feb 2 '19 at 13:32

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