Competition, variety and technological evolution: A replicator dynamics model

Saviotti, Pier Paolo; Mani, G.S.

doi:10.1007/bf01194367

Cited by 72 publications

(44 citation statements)

References 13 publications

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“…For example, the balance between inter-and intra-population competition is a crucial variable determining variety growth. It can be shown that in order for variety to grow intra-population competition must be more intense than inter-population competition (see Saviotti, Mani, 1995;Roughgarden, 1996). This result can be justified either by the myopic behaviour of incumbent firms in existing sectors or by their inability to understand and internalise the new technology.…”

Section: Two Hypotheses Link Variety To Economic Developmentmentioning

confidence: 99%

Economic development by the creation of new sectors

Saviotti

Pyka

2004

Journal of Evolutionary Economics

180

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The basic theme underlying this paper is qualitative change taking place during economic development. These changes in the composition of the economic system should become one of the most important variables in models of economic growth and development. Our knowledge of the relationship between economic development and qualitative change, however, is still very limited. This paper attempts to shed light on some important aspects of the role played by qualitative change in economic development, by laying the foundations of a model in which changes in the composition of the economic system are endogenously generated by the evolution of the system itself and, in turn, affect its future development. The model has a strong Schumpeterian flavour in that the first entrepreneur entering a market enjoys a temporary monopoly. This temporary monopoly is eroded by the entry of imitators, that gradually increases the intensity of competition. The saturation is reinforced as the demand for what was a new product comes to be satisfied. In this way the adjustment gap initially created by the innovation is eliminated transforming a niche into a mature market, which becomes one of the routines of the economic system. As soon as a sector becomes saturated there is an increasing inducement for incumbent firms to exit and to create a new niche, where once more they will have a temporary monopoly. To put it in another, slightly different, form, we can say that economic development is a process in which new activities emerge, old ones disappear, the weight of all economic activities and their patterns of interaction change. Copyright Springer-Verlag Berlin/Heidelberg 2004Economic growth and development, Qualitative change, Neo-Schumpeterian-economics,

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Section: Two Hypotheses Link Variety To Economic Developmentmentioning

confidence: 99%

Economic development by the creation of new sectors

Saviotti

Pyka

2004

Journal of Evolutionary Economics

180

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“…an omission of regular or structural innovation). Saviotti and Mani (1995) offer a similarly general model based on replicator dynamics that describes the relation between variety and competition. They distinguish between inter-and intra-technology competition and show that the variety of a system can increase only if intra-technology competition is more intense than inter-technology competition.…”

Section: Inspiration From Existing Economic and Evolutionary Modelsmentioning

confidence: 99%

Optimal diversity: Increasing returns versus recombinant innovation

Bergh

2008

Journal of Economic Behavior & Organization

133

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Choices regarding diversity play an important role in economics and innovation management, but often remain implicit. Once made explicit, the objectives of efficiency and diversity are usually posed as in conflict, as efficiency relates positively and diversity negatively to various increasing returns to scale in markets. Such a perspective, however, neglects the benefits of diversity in terms of realizing system improvements through recombinant innovation or spillovers. The latter implies a contribution of diversity to long-term efficiency. Dominant economic approaches that address diversity, such as option value and real options theories, regard benefits of diversity as exogenous. This paper proposes a simple model of variable, endogenous diversity to analyze the optimal balance between increasing returns to scale and recombinant innovation. It is discussed under which conditions one of four solutions is optimal: complete specialization regardless of which option, complete specialization in one specific option, symmetric diversity (perfect balance), and asymmetric diversity. The results give rise to a number of policy insights.

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“…Language evolution [Christiansen and Kirby 2003] seems to share and span ideas from culture and biology with respect to efforts that associate language learning, perception, and semiotics with neurological mechanisms and human population dynamics. Elsewhere, topics like competition, resource scarcity, population concentration/density, legitimacy, and organizational ecologies appear as factors shaping the evolution of markets, organizations and economies, at least at a macro level [Hannan and Carroll 1992, Nelson and Winter 1982, Saviotti and Mani 1995. Beyond this, the evolution of culture, language and economy are being explored experimentally using computational approaches [e.g., Gabora 2000].…”

Section: Evolution Models and Theoriesmentioning

confidence: 99%

Understanding Open Source Software Evolution 181

Scacchi

2006

Software Evolution and Feedback

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Competition, variety and technological evolution: A replicator dynamics model

Cited by 72 publications

References 13 publications

Economic development by the creation of new sectors

Economic development by the creation of new sectors

Optimal diversity: Increasing returns versus recombinant innovation

Understanding Open Source Software Evolution 181

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