An Evolutionary Theory of Economic Change (Google eBook)

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Harvard University Press, Jun 1, 2009 - Business & Economics - 454 pages
7 Reviews

This book contains the most sustained and serious attack on mainstream, neoclassical economics in more than forty years. Nelson and Winter focus their critique on the basic question of how firms and industries change overtime. They marshal significant objections to the fundamental neoclassical assumptions of profit maximization and market equilibrium, which they find ineffective in the analysis of technological innovation and the dynamics of competition among firms.

To replace these assumptions, they borrow from biology the concept of natural selection to construct a precise and detailed evolutionary theory of business behavior. They grant that films are motivated by profit and engage in search for ways of improving profits, but they do not consider them to be profit maximizing. Likewise, they emphasize the tendency for the more profitable firms to drive the less profitable ones out of business, but they do not focus their analysis on hypothetical states of industry equilibrium.

The results of their new paradigm and analytical framework are impressive. Not only have they been able to develop more coherent and powerful models of competitive firm dynamics under conditions of growth and technological change, but their approach is compatible with findings in psychology and other social sciences. Finally, their work has important implications for welfare economics and for government policy toward industry.

  

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Review: An Evolutionary Theory of Economic Change

User Review  - Muhammad al-Khwarizmi - Goodreads

The authors are very insightful but their prose is unfortunately reminiscent of the worst of Thomas Schelling's excesses as an author: often mind-blankingly dense. A person can read the same few ... Read full review

Contents

II
3
III
23
IV
49
V
51
VI
72
VII
96
VIII
137
IX
139
XV
246
XVI
273
XVII
275
XVIII
308
XIX
329
XX
353
XXI
355
XXII
371

X
163
XI
193
XII
195
XIII
206
XIV
234
XXIII
397
XXIV
399
XXV
417
XXVI
431
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About the author (2009)

Richard R. Nelson is George Blumenthal Professor of International and Public Affairs, Business, and Law, Emeritus, at Columbia University.

Winter is Chief Economist of the United States General Accounting Office, Washington, DC.

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