Related papers: Spontaneous Economic Order
We study the conditions under which input-output networks can dynamically attain a competitive equilibrium, where markets clear and profits are zero. We endow a classical firm network model with minimal dynamical rules that reduce…
We develop a hierarchical Bayesian dynamic game for competitive inventory and pricing under incomplete information. Two firms repeatedly choose order quantities and prices while facing two layers of uncertainty: unknown market demand and…
Cooperation is crucial for the remarkable evolutionary success of the human species. Not surprisingly, some individuals are willing to bare additional costs in order to punish defectors. Current models assume that, once set, the fine and…
We study the collective behavior of interacting agents in a simple model of market economics originally introduced by N{\o}rrelykke and Bak. A general theoretical framework for interacting traders on an arbitrary network is presented, with…
In this paper we examine sorting on the assumption that we do not know in advance which way to sort a sequence of numbers and we set at work simple local comparison and swap operators whose repeating application ends up in sorted sequences.…
Traffic congestion has large economic and social costs. The introduction of autonomous vehicles can potentially reduce this congestion by increasing road capacity via vehicle platooning and by creating an avenue for influencing people's…
Adam Smith's inquiry into the emergence and stability of the self-organization of the division of labor in commodity production and exchange is considered using statistical equilibrium methods from statistical physics. We develop a…
Sharing economy is a distributed peer-to-peer economic paradigm, which gives rise to a variety of social interactions for economic purposes. One fundamental distributed decision-making process is coalition formation for sharing certain…
Proportional response is a well-established distributed algorithm which has been shown to converge to competitive equilibria in both Fisher and Arrow-Debreu markets, for various sub-families of homogeneous utilities, including linear and…
Arthur [1,2] provided a model to explain the circumstances that lead to technological lock-in into a specific trajectory. We contribute substantially to this area of research by investigating the circumstances under which technological…
This paper deals with the modeling of social competition, possibly resulting in the onset of extreme conflicts. More precisely, we discuss models describing the interplay between individual competition for wealth distribution that, when…
This paper introduces a novel framework for analysing equilibrium in structured production systems incorporating a static social division of labour by distinguishing between consumption goods traded in competitive markets and intermediate…
I present an overview of some recent advancements on the empirical analysis and theoretical modeling of the process of price formation in financial markets as the result of the arrival of orders in a limit order book exchange. After…
A dynamic model of the social relations between workers and capitalists is introduced. The model is deduced from the assumption that the law of value is an organising principle of modern economies. The model self-organises into a dynamic…
The widening inequality in income distribution in recent years, and the associated excessive pay packages of CEOs in the U.S. and elsewhere, is of growing concern among policy makers as well as the common person. However, there seems to be…
This paper introduces a novel framework for designing fair and sustainable unemployment benefits, grounded in cooperative game theory and real-time fiscal policy. The labor market is modeled as a coalitional game, where a random subset of…
We establish a general equilibrium theory for systems of large language model (LLM) agents operating under centralized orchestration. The framework is a production economy in the sense of Arrow-Debreu (1954), extended to…
Hierarchy is one of the most conspicuous features of numerous natural, technological and social systems. The underlying structures are typically complex and their most relevant organizational principle is the ordering of the ties among the…
Will a large economy be stable? Building on Robert May's original argument for large ecosystems, we conjecture that evolutionary and behavioural forces conspire to drive the economy towards marginal stability. We study networks of firms in…
This paper examines the optimal organizational rules that govern the process of dividing a fixed surplus. The process is modeled as a sequential multilateral bargaining game with costly recognition. The designer sets the voting rule --…