Diversity in Schumpeterian games

2025-12-19

AI Summary

This study investigates how diversity changes induced by new product introductions drive the evolution of economic systems, focusing on the dynamic reconfiguration of an evolutionary stable state—termed the “Schumpeterian state”—in which innovators and imitators coexist under Schumpeterian competition. Method: Employing evolutionary game theory and population-dynamic modeling, the paper formally treats diversity change as a core structural driver of innovation, moving beyond conventional reliance on technological differentiation or cost advantages alone. Contribution/Results: Evolutionary stability analysis demonstrates that the level of product diversity fundamentally reshapes equilibrium composition: high diversity reinforces innovator dominance and delays creative destruction, whereas low diversity accelerates imitative diffusion and technological turnover. By endogenizing diversity as a strategic parameter, the framework establishes a novel theoretical benchmark for analyzing industry evolution paths, technology life cycles, and the efficacy of innovation policy interventions.

Technology Category

• Game Theory and Economic Paradigms: Mechanism Design
• Cognitive Modeling & Cognitive Systems: Computational Creativity
• Multiagent Systems: Mechanism Design

Application Category

• Economics, Online Markets and Human Computation: Fairness, privacy, and diversity in economic environments
• Web Mining and Content Analysis: Models for Web evolution
• Social Networks and Social Media: Media and governance, opinion dynamics, filter bubbles, polarization

Abstract

We examine the impact of a change in diversity introduced by a new product on the evolution of an economic system. Modeling Schumpeterian competition as a population game with a unique, attracting, evolutionarily stable state (the Schumpeterian state), in which both innovators and imitators coexist, we examine how the Schumpeterian state evolves depending on the properties of the new product developed by innovators. This way, we demonstrate that the change in diversity is one of the spiritus movens of innovation, influencing the process of creative destruction.

Problem

• Impact of new product diversity on economic system evolution
• Evolution of Schumpeterian state based on new product properties
• Diversity change drives innovation and creative destruction process

Innovation

• Modeling competition as population game
• Analyzing evolutionarily stable Schumpeterian state
• Linking product diversity to creative destruction