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Article

Resources, institutions and technologies. Game modeling of dual relations

Montenegrin Journal of Economics. 2013. Vol. 9. No. 3. P. 7-27.

A new approach is proposed revealing duality relations between a physical side of economy (resources and technologies) and its institutional side (institutional relationsd between social groups). Production function is modeled not as a primal object but rather as a secondary one defined in a dual way by the institutional side. Differential games of bargaining are proposed to model a behavior of workers and capitalists in process of prices or weights formation. These games result, correspondingly, in a price curve and in a weight curve - structures dual to a production function. Ultimately, under constant bargaining powers of the participants, the Cobb-Douglas production function is generated.