Innovation, Imitation Proximity and Mean‐Field Games Models of Economic Growth
Our exposition will be based on the premise that economic growth is driven by an interplay between
innovation and imitation in an economy composed of interacting firms operating in a stochastic environment.
Our modelling approach relies on range‐dependent processes that describe how firms consider proximity
when imitating peers who are found in a given neighbourhood in terms of productivity. Using a particularly
tractable approach based in particular on mean‐field game theory, we are able to analyse how drastically
different economic growth scenarios emerge from different imitation strategies. These emerging scenarios
range from diffusive growth where the variance of productivity grows indefinitely with time, to balanced
growth described by a stable traveling wave with fixed variance. The latter scenario is sustained only when
imitation strength among firms exceeds a critical bifurcation threshold.
Max‐Olivier Hongler EPFL, Switzerland