Dynamic competition and cooperation in systemic industries: models and experiments

The dissertation introduces a dynamic model of competition in systemic industries. In the proposed model, firms compete for a limited set of partially modular components to which they sequentially get access in a randomized fashion. The model additionally incorporates an element of cooperation in that firms are given the opportunity to form bilateral alliances when it is mutually beneficial for them to do so. In chapter 1 through a series of computer simulations we examine how the role of chance accounts for the emergence of performance heterogeneity between initially identical firms. In chapter 2, we take a complementary experimental approach and validate the behavioral assumptions of the original model in the laboratory. In chapter 3, we seek to identify the context-specific heuristics humans use in decision making environments characterized by complexity and uncertainty.