Aligning Evolutionary Principles with Market Dynamics

Klaus Solberg Söilen ()
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Klaus Solberg Söilen: Halmstad University

Chapter 3 in Applied Evolutionary Economics, 2025, pp 57-62 from Springer

Abstract: Abstract This chapter argues that economics is fundamentally evolutionary in nature and should not be treated as a discipline requiring external evolutionary theory to make sense. Instead, evolutionary principles—such as adaptation, variation, selection, niche formation, and coevolution—offer the most scientifically grounded framework for understanding complex market dynamics. By mapping these biological concepts directly onto economic behavior, the chapter challenges the longstanding dominance of physics-based models in economics, which have failed to explain crises like the 2008 financial collapse or the climate transition. Drawing on key thinkers such as Schumpeter, Nelson and Winter, and Kauffman, the chapter explores how firms and markets adapt over time, specialize, and coevolve with policy and technological environments. Core theoretical insights are supported by real-world analogies and summarized in conceptual tables. The chapter concludes by framing markets as dynamic systems subject to the same selection and survival pressures as biological organisms—thus setting the stage for later chapters that illustrate these processes historically and in applied policy contexts.

Keywords: Evolutionary economics; Adaptation; Variation; Natural selection; Niche formation; Coevolution; Fitness landscapes; Complexity; Market dynamics; Institutional change; Nelson and Winter; Schumpeter; Systems theory (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-3-032-03683-4_3

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DOI: 10.1007/978-3-032-03683-4_3

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