Evaluating Evolutionary Mechanisms by Simulation

A three year research project is investigating evolutionary processes in electronic markets. Three fundamental evolutionary mechanisms are innovation, imitation and improvement of existing procedures. As part of the initial investigation, simulation experiments have been performed to investigate the relative impact and cost of these three evolutionary mechanisms. The design of those simulation experiments is described here together with a description of the implementation and some preliminary results. The simulation was implemented in Java and is available over the Internet as an applet. The experiments are based on a relative demand function that peaks early and then tends to zero over time. So the markets to which these results apply are those in which fashion and ‘fad’ are significant factors, such as the market for electronic goods.