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Diversification versus specialization -- lessons from a noise driven linear dynamical system

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  • Gabriell Mate
  • Zoltan Neda

Abstract

Specialization and diversification are two major strategies that complex systems might exploit. Given a fixed amount of resources, the question is whether to invest this in elements that respond in a correlated manner to external perturbations, or to build a diversified system with groups of elements that respond in a not necessarily correlated manner. This general dilemma is investigated here using a high dimensional discrete dynamical system subject to an external noise, analyzing the statistical properties of an order parameter that quantifies growth. Our analytical solution suggests that diversification is a good strategy once the system has a fair amount of resources. For systems with small or extremely large supplies, we argue that specialization might be a more successful strategy. We discuss the results also from the perspective of economic and biologic systems.

Suggested Citation

  • Gabriell Mate & Zoltan Neda, 2014. "Diversification versus specialization -- lessons from a noise driven linear dynamical system," Papers 1411.4756, arXiv.org.
    • Handle: RePEc:arx:papers:1411.4756
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