 Impact of environmental dynamics on economic evolution: A stylized agent-based policy analysisVolker Nannen, Jeroen van den Bergh and A.E. Eiben Technological Forecasting and Social Change, 2013, vol. 80, issue 2, 329-350 Abstract: The general problem of how environmental dynamics affect the behavioral interaction in an evolutionary economy is considered. To this end, a basic model of a dynamic multi-sector economy is developed where the evolution of investment strategies depends on the diversity of these strategies, social connectivity, and relative contribution of sector specific investments to production. Four types of environmental dynamics are examined that differ in how gradual and how frequently the environment changes. Numerical analysis shows how the socially optimal level of diversity increases with the frequency and speed of environmental change. When there is uncertainty about the specific type of environmental dynamics—whether for lack of data or because it is not constant—the socially optimal level of diversity increases with the degree of risk aversion of the policy maker or the society. Keywords: Agent-based economics; Dynamic environments; Evolutionary economics; Optimal diversity; Public policies; Risk aversion (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:80:y:2013:i:2:p:329-350 DOI: 10.1016/j.techfore.2012.08.013 Access Statistics for this article Technological Forecasting and Social Change is currently edited by Fred Phillips More articles in Technological Forecasting and Social Change from Elsevier |
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