Archive for September 2013
While my goal is to eventually apply the Market Space model to large enterprises, I’m going to begin with startups. Obviously, my work at RSCM makes startup close to my heart. And most large enterprises were new entrants at some point, so analyzing the birth of firms seems like it should lay some crucial groundwork. (For previous posts in this series, see here: one, two, three, four.)
Looking at the search for profitable products as a Multi-Armed Bandit (MAB) problem illuminates the general complexity of the firm’s challenge (see previous posts in this series: one, two, three). But in terms of analyzing specific firm behaviors, I think it’s important to acknowledge that we don’t have a pure MAB here. It seems pretty clear there’s more causal structure in Market Space.
As I’ve written before, I am not entirely satisified with how microeconomic theory characterizes firms. So I’m going to take another tilt at the windmill and try to develop a model more suited to answering the questions I find puzzling. Note, the body of posts in this series will appear below the fold. They are as much for my own benefit as readers’, so probably interesting to a limited audience. And to any professional economists who may read this series, please be gentle. I realize it’s a rather presumptuous undertaking. But I’m more trying to work through my own thoughts rather than attempting to advance the field.