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Human Behavior and Cognition in Evolutionary Economics.

Richard R Nelson¹

¹Columbia Earth Institute, Columbia University, New York, NY USA.

Biological Theory

|February 12, 2013

Summary

This study explores evolutionary economics, emphasizing continuous innovation and creative destruction as drivers of economic change and progress. It highlights parallels and distinctions between economic and biological evolution, noting the purposive nature of economic innovation and selection.

Keywords:

Bounded rationality Innovation Problem solving Selection Understanding

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Area of Science:

Economics
Evolutionary Economics
Innovation Studies

Background:

Modern economies are characterized by constant change, driven by innovation.
The concept draws heavily from Schumpeter's theories on creative destruction.
Economic evolution shares similarities with biological evolution, including variety, selection, and emergence.

Purpose of the Study:

To present a framework for evolutionary economics.
To highlight the role of continuous innovation in economic systems.
To compare and contrast economic evolution with biological evolution.

Main Methods:

Conceptual analysis drawing on economic theory (Schumpeter).
Comparative analysis of economic and biological evolutionary processes.
Emphasis on the role of innovation and selection forces.

Main Results:

Economic systems are dynamic, propelled by ongoing innovation and creative destruction.
Economic evolution involves variety, selection, and emergence, akin to biological evolution.
Key differences exist, notably the purposive and knowledge-based nature of economic innovation and selection.

Conclusions:

Evolutionary economics provides a valuable lens for understanding dynamic economies.
Innovation is the primary engine of economic progress and transformation.
While drawing parallels with biology, economic evolution is distinct due to its purposive, knowledge-driven aspects.