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The Fisher/Price theorem applied to companies across various industries: Natural selection and environment change

Author

Listed:
  • R. Donangelo

    (Universidad de la República, Instituto de Física, Facultad de Ingeniería)

  • H. Fort

    (Universidad de la República, Instituto de Física, Facultad de Ciencias)

Abstract

We derive the fluctuating fitness levels of firms using datasets from various industries. These fitness metrics are then used to demonstrate the value of the Fisher/Price theorem as a framework for describing the fitness dynamics of firms within specific industries and for disentangling the effects of natural selection from environmental changes that influence firm fitness values. Additionally, this theorem helps to indirectly validate the selection equation as a simplified model of market selection by using fluctuating fitnesses derived from empirical data. Furthermore, it provides valuable insights into significant historical events that drive bursts of evolution across different industries or sectors, such as the Great Recession (2007–2009) and the COVID-19 pandemic.

Suggested Citation

  • R. Donangelo & H. Fort, 2025. "The Fisher/Price theorem applied to companies across various industries: Natural selection and environment change," Journal of Evolutionary Economics, Springer, vol. 35(5), pages 855-872, November.
    • Handle: RePEc:spr:joevec:v:35:y:2025:i:5:d:10.1007_s00191-025-00911-y
    DOI: 10.1007/s00191-025-00911-y
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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