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Social scientists have long sought to understand why certain people, items, or options become more popular than others. One seemingly intuitive theory is that inherent value drives popularity. An alternative theory claims that popularity is…
Large variations in stock prices happen with sufficient frequency to raise doubts about existing models, which all fail to account for non-Gaussian statistics. We construct simple models of a stock market, and argue that the large…
Focusing on supercooled phase transitions in models with classical scale symmetry, we formulate a state-of-the art framework for computing the bubble-nucleation rate, accounting for the presence of various energy scales. In particular, we…
Markets have internal dynamics leading to excess volatility and other phenomena that are difficult to explain using rational expectations models. This paper studies these using a nonequilibrium price formation rule, developed in the context…
We develop a theory of bid and ask price dynamics where the two prices form due to interaction of buy and sell orders. In this model the two prices are represented by eigenvalues of a 2x2 price operator corresponding to "bid" and "ask"…
During a speculative episode the price of an item jumps from an initial level p_1 to a peak level p_2 before more or less returning to level p_1. The ratio p_2/p_1 is referred to as the amplitude A of the peak. This paper shows that for a…
We report the first experimental observation of extreme multistability in a controlled laboratory investigation. Extreme multistability arises when infinitely many attractors coexist for the same set of system parameters. The behavior was…
We provide the first direct test of how the credibility of an auction format affects bidding behavior and final outcomes. To do so, we conduct a series of laboratory experiments where the role of the seller is played by a human subject who…
We study competitive dynamic pricing among multiple sellers, motivated by the rise of large-scale experimentation and algorithmic pricing in retail and online marketplaces. Sellers repeatedly set prices using simple learning rules and…
Datasets scraped from the internet have been critical to the successes of large-scale machine learning. Yet, this very success puts the utility of future internet-derived datasets at potential risk, as model outputs begin to replace human…
An increase in energy production from renewable energy sources is viewed as a crucial achievement in most industrialized countries. The higher variability of power production via renewables leads to a rise in ancillary service costs over…
This paper proposes a simple and parsimonious discrete-time simulation model to describe the endogenous formation and periodic collapse of financial bubbles. While existing literature has extensively explored the statistical properties of…
Randomized experiments have long been the gold standard for scientists seeking to learn about cause and effect. When randomized experiments are infeasible, scientists often resort to observational studies, which are widely available and…
Online controlled experiments (A/B tests) are fundamental to data-driven decision-making in the digital economy. However, their real-world application is frequently compromised by two critical shortcomings: the use of statistically flawed…
The product expansion of conditional probabilities for belief nets is not maximum entropy. This appears to deny a desirable kind of assurance for the model. However, a kind of guarantee that is almost as strong as maximum entropy can be…
In this study, we present an experimental work on bubble nucleation and growth using a model system comprised of viscoelastic polyvinyl butyral confined in a Hele-Shaw cell geometry that is decompressed at elevated temperatures. The…
Increases in global food prices have led to widespread hunger and social unrest---and an imperative to understand their causes. In a previous paper published in September 2011, we constructed for the first time a dynamic model that…
We consider active learning under incentive compatibility constraints. The main application of our results is to economic experiments, in which a learner seeks to infer the parameters of a subject's preferences: for example their attitudes…
The use of hypothetical instead of real decision-making incentives remains under debate after decades of economic experiments. Standard incentivized experiments involve substantial monetary costs due to participants' earnings and often…
We show that quantum trajectories become exponentially fast supported by one of their minimal invariant subspaces. Exponential convergence is shown in expectation using Lyapunov techniques. The proof is based on an in-depth study of the…