DYNAMICS OF ECONOMIC AND TECHNOLOGICAL SEARCH PROCESSES IN COMPLEX ADAPTIVE LANDSCAPES

We investigate the dynamics of economic evolution and technological change as hill-climbing in an adaptive landscape over a continuous characteristics space. A technology/firm is described by a large number of attributes or characteristics representing technology-inherent aspects, financial, organizational and economic features. These parameters span a characteristics space, which is a real Euclidean vector space, in analogy to the phenotype space in biology. Further we define a real-valued multimodal fitness function/functional and a population density over the characteristics space. The evolutionary dynamics including competition and mutations/innovations is modeled by reaction-diffusion equations of Fisher–Eigen or Lotka–Volterra type. We demonstrate the potential of such models, which in certain aspects go beyond the widespread applications of discrete replicator dynamics. Concerning technological change the emergence of technological populations as the result of a search process in an adaptive landscape will be investigated. In particular, the relation between incremental and radical innovations will be considered, especially the apparent paradox of a discrete continuum of technological change. Further, an application of the developed framework to the assessment of firms in the stock market is discussed.