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An introduction to the system dynamics of technological change: the basic tools




This Handbook presents a systematic attempt to show how building upon the achievements of the economics of innovation, an economic approach to complexity can be elaborated and fruitfully implemented. This introductory chapter articulates the view that innovation is the emergent property of a system characterized by organized complexity. It implements an approach that enables to provide economic foundations to analyzing the incentives of economic action and the notion of organized complexity. In this approach agents retain the typical characteristics of economic actors, including intentional choice and strategic conduct, augmented by the attribution of creativity. Economic agents are able to react to out-ofequilibrium conditions and may try and change both their production and their utility functions. The localized context of action and the web of knowledge interactions and externalities into which each agent is embedded is crucial to make their reaction actually creative, as opposed to adaptive, so as to shape the actual effects of their endogenous efforts to change their technologies and their preferences. In turn, the successful introduction of new localized technologies, changes the structural features of the system and hence the flows of knowledge externalities and interactions. This dynamic loop exhibits the characters of a recursive, non-ergodic and path dependent historic process. This approach enables to move away from the static, lowlevel complexity- of general equilibrium that applies when both technologies and preferences are static, as well as from the random variation of evolutionary thinking, and to grasp the system dynamics of technological change as an endogenous and recurrent process that combines rent-seeking intentionality at the agent levels with the appreciation of the knowledge externalities and interactions that stem from the organized complexity of the structural characters of the system.

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  • Antonelli, Cristiano, 2009. "An introduction to the system dynamics of technological change: the basic tools," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200905, University of Turin.
  • Handle: RePEc:uto:labeco:200905

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    1. C. Antonelli, 2007. "Localized Technological Change," Chapters,in: Elgar Companion to Neo-Schumpeterian Economics, chapter 16 Edward Elgar Publishing.
    2. Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 299-322 National Bureau of Economic Research, Inc.
    3. Stephan, Paula E., 2010. "The Economics of Science," Handbook of the Economics of Innovation, Elsevier.
    4. Freeman, C., 1991. "Networks of innovators: A synthesis of research issues," Research Policy, Elsevier, vol. 20(5), pages 499-514, October.
    5. Amendola, Mario & Gaffard, Jean-Luc, 1994. "Markets and organizations as coherent systems of innovation," Research Policy, Elsevier, vol. 23(6), pages 627-635, November.
    6. Antonelli, Cristiano, 2001. "The Microeconomics of Technological Systems," OUP Catalogue, Oxford University Press, number 9780199245536.
    7. Quere, Michel, 1994. "Basic research inside the firm: Lessons from an in-depth case study," Research Policy, Elsevier, vol. 23(4), pages 413-424, July.
    8. Oxley, Joanne E., 1999. "Institutional environment and the mechanisms of governance: the impact of intellectual property protection on the structure of inter-firm alliances," Journal of Economic Behavior & Organization, Elsevier, vol. 38(3), pages 283-309, March.
    9. Dominique Foray, 2006. "The Economics of Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562235, January.
    10. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
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    1. Cristiano, Antonelli & Ferraris, Gianluigi, 2009. "Innovation as an Emerging System Property: an Agent Based Model," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200911, University of Turin.

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