Journal of Evolutionary Economics

, Volume 29, Issue 1, pp 299–335 | Cite as

Is the market really a good teacher?

Market selection, collective adaptation and financial instability
  • Pascal SeppecherEmail author
  • Isabelle Salle
  • Dany Lang
Regular Article


This paper proposes to model market mechanisms as a collective learning process for firms in a complex adaptive system, namely Jamel, an agent-based, stock-flow consistent macroeconomic model. Inspired by Alchian’s (J Polit Econ: 5(3):211–221, 1950) “blanketing shotgun process” idea, our learning model is an ever-adapting process that puts a significant weight on exploration vis-à-vis exploitation. We show that decentralized market selection allows firms collectively to adapt their overall debt strategies to the changes in the macroeconomic environment so that the system sustains itself, but at the cost of recurrent deep downturns. We conclude that, in complex evolving economies, market processes do not lead to the selection of optimal behaviors, as the characterization of successful behaviors itself constantly evolves as a result of the market conditions that these behaviors contribute to shaping. Heterogeneity in behavior remains essential to adaptation. We come to an evolutionary characterization of a crisis, as the point where the evolution of the macroeconomic system becomes faster than the adaptation capabilities of the agents that populate it.


Evolutionary economics Learning Firms’ adaptation Business cycles 

JEL Classification

B52 C63 D21 D83 E32 



The authors would like to thank the two anonymous referees for their most useful comments and suggestions. They also wish to thank the guest editors of this issue and the participants of the symposia and seminars in which previous versions of this paper have been presented, namely: the 2nd Workshop on Modeling and Analysis of Complex Monetary Economies; the first Grenoble Post-Keynesian Conference; the 26th “Journée évolution artificielle Thématique”; the 22nd International Conference on Computing in Economics and Finance; the 6th annual congress of the French association for political economy; the 20th Conference of the Research Network Macroeconomics and Macroeconomic Policies; the 3rd Bordeaux Workshop on Agent-Based Macroeconomics; the seminar of the LEMNA; the seminar of the GREDEG.

Funding Information

This research was partly founded by the EU FP7 project MACFINROBODS, grant agreement No. 612796, as well as by the ‘Lavoie Chair’, Sorbonne Paris Cité.

Compliance with Ethical Standards

Conflict of interests

The authors declare that they have no conflict of interest.


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.CEPN (Centre d’Economie de Paris Nord), UMR CNRS 7234Université Paris 13VilletaneuseFrance
  2. 2.Utrecht UniversityTC UtrechtThe Netherlands

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