Newsletter No 4 December 2009

Evolutionary economics and the modelling of micro-mechanisms

 By Karolina Safarzyńska

eeIn a PhD thesis to be defended in a public examination at VU University on the 20th January 2010, IVM researcher Karolina Safarzyńska explores how evolutionary economics can contribute to modelling the micro-mechanisms underlying transitions towards sustainable development. Transitions are fundamental or structural changes in systems, including economic and socio-technical systems. Transitions involve, or even require, escaping lock-in of dominant, environmentally unsustainable technologies, introducing major technical or social innovations, and changing prevailing social practices and structures.

Due to the complexity of socio-economic interactions, it is not always possible to identify causes of specific unsustainable patterns of behavior, and thus target with appropriate policy instruments. The thesis proposes formal models to illustrate the usefulness of a range of evolutionary-economic techniques for modelling transitions. Modelling can help improve our understanding of the interactions of various transition mechanisms which are otherwise difficult to grasp intuitively. It allows effects of policy interventions in complex systems to be explored. Existing models of transitions focus on social phenomena and seldom address economic problems. On the other hand, mainstream (neoclassical) economic models of technological change do not account for social interactions, heterogeneity of users and their evolving preferences – even though all of these can influence the direction of innovations and patterns of socio-technological development.
Evolutionary economics offers an approach that goes beyond neoclassical economics – in the sense of employing more realistic assumptions regarding the behaviour and heterogeneity of consumers, firms and investors. It can complement current transition models by providing a better understanding of economic dynamics. This thesis explores the role of lock-in, path-dependence, co evolution, group selection and recombinant innovation in the process of transitions.

For more information you can contact MA. Karolina Safarzyńska, karolina.safarzynska@ivm.vu.nl