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Many industries are populated by firms which strive to gain competitive advantage over rivals through superior innovation (Schumpeterian competition). Furthermore, unlike their textbook counterparts, firms in the real world are characterized by bounded rationality which necessarily constrains them to satisfy, rather than maximize, their objectives. Taking the seminal work of Nelson and Winter as the point of departure, this book presents a computer simulation model of artificial economic evolution allowing the author to track the development of industry structure and welfare in an economic system populated by boundedly rational firms. In the course of the text, the author suggests a reinterpretation of the meaning of collusive behaviour based upon the premise that firms are fundamentally incapable of identifying a joint profit of maximizing outcome. The book contains a clear analysis of the social and economic welfare impacts of this dynamic system and its implications for competition authorities are explicitly drawn out. A fully annotated copy of the simulation program is included to allow easy replication of the analysis.