IDEAS home Printed from
   My bibliography  Save this paper

Multigame models of innovation in evolutionary economics


  • M. J. Gagen

    (University of Queensland)


We incorporate information measures representing knowledge into an evolutionary model of coevolving firms and markets whereby the growing orderliness of firms potentiates a predictable progression of market exchange innovations which themselves become beneficial only with the growing orderliness of firms. We do this by generalizing Nelson and Winter style evolutionary models which are well suited to the study of entry, exit, and growth dynamics at the level of individual firms or entire industries. The required innovation is to use information measures to impose an order on the routines constituting a firm, and by correlating order with firm profitability, allow the preferential selection of innovations which increase order. In this viewpoint, the coherent mathematical framework provided by information and probability theory describes firm orderliness and variability, as well as all selection operations. This informational approach allows modelling the synergistic interactions between routines in a single firm and between different firms in a general but comprehensive manner, so that we can successfully model and predict innovations specifically focussed on organizational order. In particular, we can predict the coevolution over time of firm organizational complexity and of increasingly sophisticated market exchange mechanisms for routines permitting that increased organizational order. We demonstrate our approach using numerical simulations and analytic techniques exploiting a multigame player environment.

Suggested Citation

  • M. J. Gagen, 2003. "Multigame models of innovation in evolutionary economics," Game Theory and Information 0310001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpga:0310001
    Note: Type of Document - Latex/PDF; pages: 13 ; figures: 4

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Takashi Hashimoto & Makoto Nishibe, 2017. "Theoretical model of institutional ecosystems and its economic implications," Evolutionary and Institutional Economics Review, Springer, vol. 14(1), pages 1-27, June.

    More about this item


    Evolution; Knowledge; Markets; Evolutionary dynamics; Games; Multigame Environments;
    All these keywords.

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:0310001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: EconWPA (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.