Cognitive capacity as competitive advantage: a simulation test

Several authors have argued that differences in cognitive capabilities between firms may represent a potential source of competitive advantage. A computational model was used to demonstrate that firms with a higher cognitive capacity are capable of outperforming firms with a lower cognitive capacity. However, the effect is observed to decline as the absolute cognitive capacity of a firm increases. The effect was seen to depend heavily on the rule selection scheme utilized for the cognitive agents that may have wider implications for simulation models in other fields.