Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119850
Authors: 
Dosi, Giovanni
Pereira, Marcelo C.
Virgillito, Maria Enrica
Year of Publication: 
2015
Series/Report no.: 
LEM Working Paper Series 2015/04
Abstract: 
Evolutionary theories of economic change identify the processes of idiosyncratic learning by individual firms and of market selection as the two main drivers of the dynamics of industries. Are such processes able to robustly account for the statistical regularities which industrial structures and dynamics display? In this work we address this question by means of a simple agent-based model formalizing the mechanisms of learning and selection. The interplay between these two engines shapes the dynamics of entry-exit and market shares and, collectively, the productivity and the size distributions and their patterns of growth. As such, and despite its simplicity, the model is able to robustly reproduce an ensemble of empirical stylised facts, including ample heterogeneity in productivity distributions, persistent market turbulence and fat-tailed distribution of growth rates.
Subjects: 
Firms Growth Rate
Productivity
Fat Tail Distributions
Learning Processes
Market Selection
JEL: 
C63
L11
L6
Document Type: 
Working Paper

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