An Evolutionary Theory of Economic Change (Belknap Press) [Paperback]

Richard R. Nelson (Author), Sidney G. Winter (Author)

Book Description

Publication Date: October 15, 1985 | ISBN-10: 0674272285 | ISBN-13: 978-0674272286

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.

Editorial Reviews

Review

The book ranges from subtle theoretical analyses of the nature of choice to highly explicit mathematical modeling, from the theory of the firm to the theory of bureaucratic agencies. It is very engagingly written, and conveys extremely well the dilemma that must haunt any social scientist worth his salt: the necessity of choosing between realism ism and simplicity as guides to theory construction.
--Jon Elster (London Review of Books)

[An] extremely interesting book...This volume increases one's confidence that, after all these years, Schumpeter's intuition can be stated in a formally respectable way, and therefore that the field of industrial organization can begin solving its most important problems. (Journal of Comparative Economics)

An important and interesting book. (Journal of Political Economy)

The book spans an enormous literature--dealing with economics as a process, evolutionary modeling, Schumpeterian competition, organization form, and the like--and performs important interpretive and integrative functions. Mainly, however, the book represents a significant original research contribution in both methodological and substantive respects. It will influence teaching, research, and public policy relating to complex economic systems for years to come. While the book is written by and primarily for economists, it is broadly conceived and should impact social science research quite generally.
--Oliver Williamson, University of Pennsylvania

Review

The book spans an enormous literature--dealing with economics as a process, evolutionary modeling, Schumpeterian competition, organization form, and the like--and performs important interpretive and integrative functions. Mainly, however, the book represents a significant original research contribution in both methodological and substantive respects. It will influence teaching, research, and public policy relating to complex economic systems for years to come. While the book is written by and primarily for economists, it is broadly conceived and should impact social science research quite generally. (Oliver Williamson, University of Pennsylvania ) --This text refers to an out of print or unavailable edition of this title.

See all Editorial Reviews

Product Details

• Paperback: 454 pages
• Publisher: Belknap Press of Harvard University Press (October 15, 1985)
• Language: English
• ISBN-10: 0674272285
• ISBN-13: 978-0674272286
• Product Dimensions: 6 x 0.9 x 9 inches
• Shipping Weight: 1.7 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #567,037 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

4 of 4 people found the following review helpful

5.0 out of 5 stars A Challenge to Orthodox Economic Theory June 30, 2012

By BoilerMaker

Format:Paperback|Amazon Verified Purchase

Although this book is positioned to challenge some of the fundamental assumptions of orthodox economic theory, it has made a much greater impact on management science than on economics. That being said, the ideas presented here are a clear step forward in economic theorizing. To set the stage for their economic models, which are covered in a later part of their book, the writers begin with a description of the modern organization. Although perhaps no their intention, it is this part of the book that is so pivotal to contemporary thinking about organizations. Their evolutionary theory is today a key to understanding the boundaries of organizations as well as what it is that makes some organizations successful. This is a book for academics. Casual readers or management practitioners will not find the concepts here so interesting.

4 of 4 people found the following review helpful

5.0 out of 5 stars Brilliant January 12, 2012

By dghoopes

Format:Paperback

Nelson and Winter address some of that era's deepest problems in understanding economic organization. Thirty years later their thinking is still fresh and entertaining. This is an academic book. I doubt most non-academics will find it that interesting. Any academic interested in business strategy, industry structure, and firm and industry evolution must read this. They are very good writers, clear and cogent thinkers. It is a classic.

1 of 1 people found the following review helpful

4.0 out of 5 stars A Classic, but dated after 30 years March 16, 2013

By R. Westgren

Format:Paperback|Amazon Verified Purchase

This is the standard text to introduce the modern era of evolutionary economics. It spawned two different approaches to doing evolutionary economics; both are related to Nelson and Winter. But much of what has transpired in simulation modeling and in the conceptual models of evolutionary systems is beyond this text. Read this as an introduction, but not as the state of the art.