Archive for September 2013
Startups in “Market Space”
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.)
Hill Climbing in “Feature Subspace”
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.
“Market Space” as a Multi-Armed Bandit Problem
In the last post, I presented my 30,000-foot view of Market Space. I think it already provides some intuition. From the final diagram, you can literally see the firm’s search problem. But our eventual goal is a more formal model. So we need to drop our altitude a bit.
“Market Space” Approach to the Firm
In our last episode, I sketched out the goals for my new model of the firm. In this post, I’ll present the high level view of my model, which I call “Market Space” (yes, we’ll be using a high-dimensional space again).
Another Tilt at the Microeconomics Windmill
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.
Possible Insight 