Exploitation, Exploration and Innovation in a Model of Endogenous Growth with Locally interacting Agents
AbstractThe 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2002/25.
Date of creation: 29 Dec 2002
Date of revision:
Innovation; Endogenous Growth; Local Interactions; Exploration vs. Exploitation.;
Other versions of this item:
- Fagiolo, Giorgio & Dosi, Giovanni, 2003. "Exploitation, exploration and innovation in a model of endogenous growth with locally interacting agents," Structural Change and Economic Dynamics, Elsevier, vol. 14(3), pages 237-273, September.
- NEP-ALL-2002-11-28 (All new papers)
- NEP-CBE-2002-11-28 (Cognitive & Behavioural Economics)
- NEP-DEV-2002-11-28 (Development)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Campbell, John & Mankiw, Gregory, 1987.
"Are Output Fluctuations Transitory?,"
3122545, Harvard University Department of Economics.
- Fatas, Antonio, 2000.
"Endogenous growth and stochastic trends,"
Journal of Monetary Economics,
Elsevier, vol. 45(1), pages 107-128, February.
- Alan P. Kirman, 1994.
"Economies with Interacting Agents,"
94-05-030, Santa Fe Institute.
- Steven N. Durlauf & Danny T. Quah, 1998.
"The New Empirics of Economic Growth,"
NBER Working Papers
6422, National Bureau of Economic Research, Inc.
- S Durlauf & Danny Quah, 1998. "The New Empirics of Economic Growth," CEP Discussion Papers dp0384, Centre for Economic Performance, LSE.
- Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," Working Papers 98-01-012, Santa Fe Institute.
- Durlauf,S.N. & Quah,D.T., 1998. "The new empirics of economic growth," Working papers 3, Wisconsin Madison - Social Systems.
- Kirman, Alan, 1993. "Ants, Rationality, and Recruitment," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 137-56, February.
- Silverberg, Gerald & Verspagen, Bart, 1994.
"Collective Learning, Innovation and Growth in a Boundedly Rational, Evolutionary World,"
Journal of Evolutionary Economics,
Springer, vol. 4(3), pages 207-26, September.
- Silverberg, Gerald & Verspagen, Bart, 1994. "Collective learning, innovation and growth in a boundedly rational, evolutionary world," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18072, Maastricht University.
- Romer, Paul M, 1990.
"Endogenous Technological Change,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S71-102, October.
- Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
- Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
- Aghion, Philippe & Howitt, Peter, 1992.
"A Model of Growth through Creative Destruction,"
Econometric Society, vol. 60(2), pages 323-51, March.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Boyan Jovanovic, 1995. "Learning and Growth," NBER Working Papers 5383, National Bureau of Economic Research, Inc.
- Nelson, Richard R, 1998. "The Agenda for Growth Theory: A Different Point of View," Cambridge Journal of Economics, Oxford University Press, vol. 22(4), pages 497-520, July.
- McGrattan, Ellen R. & Schmitz, James Jr., 1999.
"Explaining cross-country income differences,"
Handbook of Macroeconomics,
in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 10, pages 669-737
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
- G. Silverberg & B. Verspagen, 1995. "Evolutionary Theorizing on Economic Growth," Working Papers wp95078, International Institute for Applied Systems Analysis.
- Joshua M. Epstein & Robert L. Axtell, 1996. "Growing Artificial Societies: Social Science from the Bottom Up," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550253, June.
- Giovanni Dosi & Luigi Marengo & Giorgio Fagiolo, 2003.
"Learning in Evolutionary Environments,"
LEM Papers Series
2003/20, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Freeman, Chris, 1994. "The Economics of Technical Change," Cambridge Journal of Economics, Oxford University Press, vol. 18(5), pages 463-514, October.
- Giorgio Fagiolo, 2000. "Endogenous Growth in Open-Ended Economies with Locally Interacting Agents," LEM Papers Series 2000/07, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Chiaromonte, Francesca & Dosi, Giovanni, 1993. "Heterogeneity, competition, and macroeconomic dynamics," Structural Change and Economic Dynamics, Elsevier, vol. 4(1), pages 39-63, June.
- Gene M. Grossman & Elhanan Helpman, 1991.
"Trade, Knowledge Spillovers, and Growth,"
NBER Working Papers
3485, National Bureau of Economic Research, Inc.
- Cochrane, John H, 1988. "How Big Is the Random Walk in GNP?," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 893-920, October.
- Jovanovic, Boyan & Rob, Rafael, 1989. "The Growth and Diffusion of Knowledge," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 569-82, October.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.