Related papers: Spontaneous Economic Order
This paper develops a theory of competitive equilibrium with indivisible goods based entirely on economic conditions on demand. The key idea is to analyze complementarity and substitutability between bundles of goods, rather than merely…
We develop an analytically tractable model featuring heterogeneous workers and firms, where labor markets clear through a one-to-many sorting mechanism. Firms determine both the number and composition of their employees, shaping (1) the…
Order can spontaneously emerge from seemingly noisy interactions between biological agents, like a flock of birds changing their direction of flight in unison, without a leader or an external cue. We are interested in the generic conditions…
There are clear benefits associated with a particular consumer choice for many current markets. For example, as we consider here, some products might carry environmental or `green' benefits. Some consumers might value these benefits while…
Beyond its obvious macro-economic relevance, fiat money has important micro-economic implications. They matter for addressing No. 8 in Smale's "Mathematical Problems for the Next Century": extend the mathematical model of general…
We propose a pseudo-market solution to resource allocation problems subject to constraints. Our treatment of constraints is general: including bihierarchical constraints due to considerations of diversity in school choice, or scheduling in…
I characterize optimal government policy in a sticky-price economy with different types of consumers and endogenous financial constraints in the banking and entrepreneurial sectors. The competitive equilibrium allocation is constrained…
In our previous paper we proved that every affine economy has a competitive equilibrium. We define a simplex economy as an affine economy consisting of a stochastic allocation (defining the initial endowments) and a variation with…
The objective of this paper is to initiate a qualitative analysis of dynamic flow in traffic networks by using the competitive equilibrium model of multiple market systems. A network is modeled as a dynamic graph where routes (edges) are…
Although production is an integral part of the Arrow-Debreu market model, most of the work in theoretical computer science has so far concentrated on markets without production, i.e., the exchange economy. This paper takes a significant…
Models that explain the economical and political realities of nowadays societies should help all the world's citizens. Yet, the last four years showed that the current models are missing. Here we develop a dynamical society-deciders model…
"Economists miss the boat when they act as if Arrow and Debreu's general equilibrium model accurately describes markets in the real world of constant change. In contrast, the classical view on the market mechanism offers a helpful…
General equilibrium, the cornerstone of modern economics and finance, rests on assumptions many markets do not meet. Spectrum auctions, electricity markets, and cap-and-trade programs for resource rights often feature non-convexities in…
This paper considers the core of a competitive market economy with an endogenous social division of labour. The theory is founded on the notion of a "consumer-producer", who consumes as well as produces commodities. First, we show that the…
The key characteristic of a true free market economy is that exchanges are entirely voluntary. When there is a monopoly in the creation of currency as we have in today's markets, you no longer have a true free market. Features of the…
In this paper, we examine in an abstract framework, how a tradeoff between efficiency and robustness arises in different dynamic oligopolistic market architectures. We consider a market in which there is a monopolistic resource provider and…
This paper presents a praxeological analysis of artificial intelligence and algorithmic governance, challenging assumptions about the capacity of machine systems to sustain economic and epistemic order. Drawing on Misesian a priori…
Emergence of hierarchies is investigated by Monte Carlo simulation in a timid society where all individuals are pacifist. The self-organiztion of hierarchies is shown to occur in two steps as the population is increased, i.e. there are…
The transient fluctuation of the prosperity of firms in a network economy is investigated with an abstract stochastic model. The model describes the profit which firms make when they sell materials to a firm which produces a product and the…
This paper studies Markov perfect equilibria in a repeated duopoly model where sellers choose algorithms. An algorithm is a mapping from the competitor's price to own price. Once set, algorithms respond quickly. Customers arrive randomly…