Endogenous local interaction and multi-product firms

Multi-product firms are modelled as locally interacting entities that gathe r information on the profitability of product combinations in an environmen t defined in terms of their currently supplied markets. They learn from the ir own past play. Local information gathering may slow down convergence and may prohibit profit rates from becoming equal. Cycles show parts of the ec onomy that are in rest, while others remain in a state of flux. The first t wo results stem from the endogeneity of the interaction structure, while th e third follows from the interplay of learning and information gathering.