Notions of Darwinian selection have been implicit in economic theory for atleast sixty years. Richard Nelson and Sidney Winter have argued that whileevolutionary thinking was prevalent in prewar economics, the postwarNeoclassical school became almost entirely preoccupied with equilibriumconditions and their mathematical conditions. One of the problems with theeconomic interpretation of firm selection through competition has been a weakgrasp on an incomplete scientific paradigm. As I.F. Price notes, "Thebiological metaphor has long lurked in the background of management theorylargely because the message of 'survival of the fittest' (usually wronglyattributed to Charles Darwin rather than Herbert Spencer) provides a seeminglynatural model for market competition (e.g. Alchian 1950, Merrell 1984,Henderson 1989, Moore 1993), without seriously challenging the underlyingparadigms of what an organisation is." In this paper we examine the applicationof dynamic fitness landscape models to economic theory, particularly the theoryof technology substitution, drawing on recent work by Kauffman, Arthur,McKelvey, Nelson and Winter, and Windrum and Birchenhall. In particular we useProfessor Post's early work with John Holland on the genetic algorithm toexplain some of the key differences between static and dynamic approaches toeconomic modeling.
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