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Evolutionary Theorizing in Economics

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  • Richard R. Nelson
  • Sidney G. Winter

Abstract

This paper reviews the case for an evolutionary approach to problems of economic analysis, ranging from the details of individual firm behavior in the short run through industrial dynamics to the historical evolution of institutions and technologies. We draw upon a substantial body of recent research contributions. We characterize micro behavior as governed by skills and routines that are shaped by learning and selection. We then consider major areas of application of evolutionary thinking, including the analysis of competitive processes in technologically dynamic industries and the evolution of institutions and technologies.

Suggested Citation

  • Richard R. Nelson & Sidney G. Winter, 2002. "Evolutionary Theorizing in Economics," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 23-46, Spring.
  • Handle: RePEc:aea:jecper:v:16:y:2002:i:2:p:23-46
    Note: DOI: 10.1257/0895330027247
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/0895330027247
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    References listed on IDEAS

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    1. Massimo Warglien & Alessandro Narduzzo & Elena Rocco, 1997. "Talking about routines in the field: the emergence of organizational capabiliies in a new cellular phone network company," CEEL Working Papers 9706, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    2. Hodgson, Geoffrey M, 1994. "Optimisation and Evolution: Winter's Critique of Friedman Revisited," Cambridge Journal of Economics, Oxford University Press, vol. 18(4), pages 413-430, August.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    4. Witold Kwasnicki, 1996. "Knowledge, Innovation and Economy," Books, Edward Elgar Publishing, number 844.
    5. Nelson, Richard R. & Sampat, Bhaven N., 2001. "Making sense of institutions as a factor shaping economic performance," Journal of Economic Behavior & Organization, Elsevier, vol. 44(1), pages 31-54, January.
    6. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
    7. Nelson, Richard R. & Winter, Sidney G., 1993. "In search of useful theory of innovation," Research Policy, Elsevier, vol. 22(2), pages 108-108, April.
    8. Moses Abramovitz, 1956. "Resource and Output Trends in the United States Since 1870," NBER Books, National Bureau of Economic Research, Inc, number abra56-1, July.
    9. Langlois,Richard, 1989. "Economics as a Process," Cambridge Books, Cambridge University Press, number 9780521378598, October.
    10. Steven Klepper & Kenneth L. Simons, 2000. "The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 728-760, August.
    11. Mowery,David C. & Nelson,Richard R. (ed.), 1999. "Sources of Industrial Leadership," Cambridge Books, Cambridge University Press, number 9780521645201, October.
    12. Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
    13. Mie Augier & James G. March (ed.), 2002. "The Economics of Choice, Change and Organization," Books, Edward Elgar Publishing, number 2013.
    14. Moses Abramovitz, 1956. "Resource and Output Trends in the United States Since 1870," NBER Chapters,in: Resource and Output Trends in the United States Since 1870, pages 1-23 National Bureau of Economic Research, Inc.
    15. Mowery,David C. & Nelson,Richard R. (ed.), 1999. "Sources of Industrial Leadership," Cambridge Books, Cambridge University Press, number 9780521642545, October.
    16. Geoffrey M. Hodgson, 1999. "Evolution and Institutions," Books, Edward Elgar Publishing, number 1481.
    17. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    18. Pakes, Ariel & Ericson, Richard, 1998. "Empirical Implications of Alternative Models of Firm Dynamics," Journal of Economic Theory, Elsevier, vol. 79(1), pages 1-45, March.
    19. 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.
    20. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
    21. Sidney G. Winter, 1971. "Satisficing, Selection, and the Innovating Remnant," The Quarterly Journal of Economics, Oxford University Press, vol. 85(2), pages 237-261.
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