Editing Evolutionary economics (section)

===''An Evolutionary Theory of Economic Change'' and beyond===

[[File:Geoffrey_Hodgson,_2006.jpg|thumb|right|[[Geoffrey Hodgson]], recognised as one of the leading figures of modern critical [[Institutional economics|institutionalism]], Emeritus Professor in Management, [[Loughborough University]]]]

The publication of ''An Evolutionary Theory of Economic Change'' by [[Richard R. Nelson]] and [[Sidney G. Winter]] in 1982 marked a turning point in the field of evolutionary economics. Inspired by Alchian's work about the decision-making process of firms under uncertainty and the behavioural theory of the firm by [[Richard Cyert]] and [[James March]],<ref name="CyertMarch1963">[[Richard Cyert|Cyert, R. M.]], [[James March|March, J. G.]] (1963). ''[[A Behavioral Theory of the Firm]]''. Engelwood Cliffs, NJ: Prentice-Hall.</ref><ref name="Hodgson2012"></ref> Nelson and Winter constructed a comprehensive evolutionary theory of business behavior using the concept of [[natural selection]]. In this framework, firms operate on the basis of organizational routines, which they evaluate and may change while functioning in a certain selection environment.<ref name="NelsonWinter1982">[[Richard R. Nelson|Nelson, R. R.]], [[Sidney G. Winter|Winter, S. G.]] (1982). ''An Evolutionary Theory of Economic Change''. Cambridge, MA: Harvard University Press. [https://web.archive.org/web/20230323020332/http://inctpped.ie.ufrj.br/spiderweb/pdf_2/Dosi_1_An_evolutionary-theory-of_economic_change..pdf Archived] from [http://inctpped.ie.ufrj.br/spiderweb/pdf_2/Dosi_1_An_evolutionary-theory-of_economic_change..pdf] on March 23, 2023.</ref> Since then, evolutionary economics, as noted by [[Nicolai Foss]], has been concerned with “the transformation of already existing structures and the emergence and possible spread of novelties.”<ref name="Foss1994">[[Nicolai Foss|Foss, N. J.]] (1994). Realism and Evolutionary Economics. ''Journal of Social and Evolutionary Systems, 17''(1), pp. 21-40.</ref> Economies have been viewed as a complex system, a result of causal interactions (non-linear and chaotic) between different agents and entities with varied characteristics.<ref>Saviotti, P. P. (1996). ''Technological Evolution, Variety and the Economy''. Aldershot: Edward Elgar.</ref> Instead of perfect information and rationality, [[Herbert A. Simon|Herbert Simon's]] concept of [[bounded rationality]]<ref name="Simon1975">[[Herbert A. Simon|Simon, H. A.]] (1957). ''Models of Man: Social and Rational. Mathematical Essays on Rational Human Behavior in a Social Setting''. New York: Wiley.</ref> has become prevailing.

By the 1990s, as put by [[Geoffrey Hodgson]],<ref name="Hodgson2012"></ref>

<blockquote>“it was possible to write of an international network or ‘[[invisible college]]’ of ‘evolutionary economists’ who, despite their analytical differences, were focusing on the problem of analyzing structural, technological, cultural and institutional change in economic systems… They were also united by their common dislike of the static and equilibrium approaches that dominated mainstream economics.”</blockquote>