Simulation models of technological innovation

The use of simulation modelling techniques in studies of technological inno vation dates back to Nelson and Winter's 1982 book, An Evolutionary Theory of Economic Change. Four main issues are identified in reviewing the key co ntributions in this burgeoning literature. First, a key driver in the const ruction of computer simulations has been the desire to develop theoretical models capable of dealing with the complex phenomena characteristic of tech nological innovation. Second, no single model captures all of the dimension s and stylized facts of innovative learning. The article develops a taxonom y that distinguishes between these dimensions and clarifies the different p erspectives underpinning the contributions made by mainstream economists an d nonmainstream, neo-Schumpeterian economists. Third, the simulation models are heavily influenced by the research questions of these different school s of thought. Finally, attention is drawn to the difference between learnin g and adaptation within a static environment and within a dynamic environme nt in which the introduction of new artifacts and patterns of behavior chan ges the selective pressure faced by agents.