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The economy as an evolving network


  • Alan Kirman

    (GREQAM, EHESS and Universite d'Aix-Marseille Ill, Institut Universitaire de France, 2, rue de la Charite, F-13002 Marseille, France)


The purpose of this paper is to suggest a view of the economy as a network of links between the individuals involved. One approach is to consider the structure of links as fixed as is the case with spatial models in which agents are situated on a lattice, another is to regard all links as possible but stochastic. If the probability of any of the links existing is uniform we have the situation familiar from the "population games" of evolutionary game theory. The basic idea here is to allow the network to evolve and to make the probability of each of the links dependent on the experience of the agents involved. Such analysis can give rise to interesting behaviour on the aggregate level which is very different from that which might have been predicted by looking at the individuals in isolation.

Suggested Citation

  • Alan Kirman, 1997. "The economy as an evolving network," Journal of Evolutionary Economics, Springer, vol. 7(4), pages 339-353.
  • Handle: RePEc:spr:joevec:v:7:y:1997:i:4:p:339-353

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    References listed on IDEAS

    1. Frank R. Lichtenberg, 2001. "The Allocation of Publicly Funded Biomedical Research," NBER Chapters,in: Medical Care Output and Productivity, pages 565-590 National Bureau of Economic Research, Inc.
    2. DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G. & Lasagna, Louis, 1991. "Cost of innovation in the pharmaceutical industry," Journal of Health Economics, Elsevier, vol. 10(2), pages 107-142, July.
    3. Frank R. Lichtenberg, 2001. "The Effect of New Drugs on Mortality from Rare Diseases and HIV," NBER Working Papers 8677, National Bureau of Economic Research, Inc.
    4. Henry Grabowski & John Vernon, 2000. "The determinants of pharmaceutical research and development expenditures," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 201-215.
    5. Grabowski, Henry G & Vernon, John M & Thomas, Lacy Glenn, 1978. "Estimating the Effects of Regulation on Innovation: An International Comparative Analysis of the Pharmaceutical Industry," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 133-163, April.
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    More about this item


    Market organisation ; Network ; Communication ; Evolution ; Learning;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms


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