Exploitation, Exploration and Innovation in a Model of Endogenous Growth with Locally interacting Agents

Giorgio Fagiolo () and Giovanni Dosi

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

Abstract: The paper presents a model of endogenous growth in which firms are modeled as boundedly-rational, locally interacting, agents. Firms produce a homogeneous good employing technologies located in an open-ended technological space and are allowed to either imitate existing, similar practices or to locally explore the technological space to find new, more productive techniques. We first identify sufficient conditions for the emergence of empirically plausible GNP time-series characterized by self-sustained growth. Then, we study the trade-off between individual rationality and collective outcomes by providing an example in which more rational agents systematically perform worse than less rational ones.

Keywords: Innovation; Endogenous Growth; Local Interactions; Exploration vs. Exploitation. (search for similar items in EconPapers)
Date: 2002-12-29
New Economics Papers: this item is included in nep-cbe and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Exploitation, exploration and innovation in a model of endogenous growth with locally interacting agents (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ssa:lemwps:2002/25

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