Economic Organization, Capabilities and Coordination

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INFORMATION, SIMILAR AND COMPLEMENTARY ASSETS, AND INNOVATION POLICY

Paul L. Robertson

INTRODUCTION

In Information and Investment: A Study in the Working of the Competitive Economy, G. B. Richardson investigates the effects of imperfect knowledge on investment decisions to demonstrate that the equilibrium situations posited by neoclassical economists are unlikely to be achieved. In particular, Richardson shows that it is improbable that the investment decisions of individual producers will lead to socially optimal outcomes because, in the absence of knowledge as to the plans of their competitors, businesses will either over-or underinvest in capacity when they perceive an opportunity for expansion. If each producer of a good believes that ...