The footprint of evolutionary processes of learning and selection upon the statistical properties of industrial dynamics

Giovanni Dosi, Marcelo Pereira and Maria Enrica Virgillito

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: Evolutionary theories of economic change identify the processes of idiosyncratic learningby individual firms and of market selection as the two main drivers of the dynamics of industries. Are such processes able to robustly account for the statistical regularities which industrial structures and dynamics display? In this work we address this question by means of a simple agent-based model formalizing the mechanisms of learning and selection. The interplay between these two engines shapes the dynamics of entry-exit and market shares and, collectively, the productivity and the size distributions and their patterns of growth. As such, and despite its simplicity, the model is able to robustly reproduce an ensemble of empirical stylised facts, including ample heterogeneity in productivity distributions, persistent market turbulence and fat-tailed distribution of growth rates.

Keywords: Firms' Growth Rate; Productivity; Fat Tail Distributions; Learning Processes; Market Selection (search for similar items in EconPapers)
Date: 2015-01-04
New Economics Papers: this item is included in nep-evo and nep-hme
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: The footprint of evolutionary processes of learning and selection upon the statistical properties of industrial dynamics (2017)
Working Paper: THE FOOTPRINT OF EVOLUTIONARY PROCESSES OF LEARNING AND SELECTION UPON THE STATISTICAL PROPERTIES OF INDUSTRIAL DYNAMICS (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2015/04

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