IMITATION, PROXIMITY, AND GROWTH — A COLLECTIVE SWARM DYNAMICS APPROACH

Olivier Gallay, Fariba Hashemi and Max-Olivier Hongler ()
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Olivier Gallay: Faculty of Business and Economics (HEC Lausanne), University of Lausanne, Department of Operations, Quartier UNIL-Chamberonne, CH-1015 Lausanne, Switzerland
Fariba Hashemi: #x2020;Chair of Entrepreneurial Risks, ETH Zurich (ETHZ), Department of Management, Technology, and Economics, Scheuchzerstrasse 7, CH-8092 Zurich, Switzerland‡Unit for Bioentrepreneurship, Karolinska Institute, Department of LIME, 171 77 Stockholm, Sweden
Max-Olivier Hongler: #xA7;Microengineering Institute EPFL, School of Engineering (STI), Station 17, CH-1015 Lausanne, Switzerland

Advances in Complex Systems (ACS), 2019, vol. 22, issue 05, 1-43

Abstract: This paper is based on the premise that economic growth is driven by an interplay between innovation and imitation in an economy composed of interacting firms operating in a stochastic environment. A novel approach to modeling imitation is presented based on range-dependent processes that describe how firms consider proximity when imitating peers who are found in a given neighborhood in terms of productivity. Using a particularly tractable approach, we are able to analyze how drastically different economic growth scenarios emerge from different imitation strategies. These emerging scenarios range from diffusive growth where the variance of productivity grows indefinitely, to balanced growth described by a traveling wave with fixed variance. The latter scenario is sustained only when imitation strength among firms exceeds a critical bifurcation threshold.

Keywords: Economic growth; innovation propagation; imitation process; interaction range; growth regime transition; mean-field games (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1142/S0219525919500115

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