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We introduce a simple dynamical model of two interacting communities whose elements are subject to stochastic discrete-time updates governed by only bilinear interactions. When the intra- and inter-couplings are cooperative, the two…
A stochastic model with a continuum of economic agents often involves shocks at both macro and micro levels. This can be formalized by a continuum of random variables that are conditionally independent given the macro level shocks. Based on…
A hydrodynamic model of active, low Reynolds number suspensions, shows the emergence of an asymptotic state with a universal spectral scaling and non-Gaussian (intermittent) fluctuations in the velocity field. Such states arise when these…
Following the financial crisis of 2007-2008, a deep analogy between the origins of instability in financial systems and complex ecosystems has been pointed out: in both cases, topological features of network structures influence how easily…
We examine dynamic coupling and feedback effects between High Frequency Traders (HFTs) and how they can destabilize markets. We develop a general framework for modelling dynamic interaction based on recurrence relations, and use this to…
Coordination games admit two types of equilibria: pure equilibria, where all players successfully coordinate their actions, and mixed equilibria, where players frequently experience miscoordination. The existing literature shows that under…
In this letter, structural rigidity concepts are used to understand the origin of instabilities in granular aggregates. It is shown that: a) The contact network of a noncohesive granular aggregate becomes exactly isostatic in the limit of…
Dynamical systems can be prone to severe fluctuations due to the presence of chaotic dynamics. This paper explains for a toy chaotic economic model how such a system can be regulated by the application of relatively weak control to keep the…
Multistability is a phenomenon prevalent in many natural systems. In climate, for example, it allows the possibility of irreversible consequences on planetary scale as a result of climate change. Indeed, a climate ``tipping element'' is a…
We analyze the stability properties of equilibrium solutions and periodicity of orbits in a two-dimensional dynamical system whose orbits mimic the evolution of the price of an asset and the excess demand for that asset. The construction of…
We present a macroeconomic agent-based model that combines several mechanisms operating at the same timescale, while remaining mathematically tractable. It comprises enterprises and workers who compete in a job market and a commodity goods…
We propose a new mean-field game model with two states to study synchronization phenomena, and we provide a comprehensive characterization of stationary and dynamic equilibria along with their stability properties. The game undergoes a…
Financial and economic history is strewn with bubbles and crashes, booms and busts, crises and upheavals of all sorts. Understanding the origin of these events is arguably one of the most important problems in economic theory. In this…
We study deterministic continuous-time lossy dynamical flow networks with constant exogenous demands, fixed routing, and finite flow and buffer capacities. In the considered model, when the total net flow in a cell ---consisting of the…
We propose and analyze numerically a simple dynamical model that describes the firm behaviors under uncertainty of demand forecast. Iterating this simple model and varying some parameters values we observe a wide variety of market dynamics…
Stochastic feedback systems give rise to a variety of notions of stability. The conditions for the stability of the median, mean, and variance stability conditions differ. These conditions can be stated explicitly for scalar discrete-time…
This paper considers robust stability analysis of a large network of interconnected uncertain systems. To avoid analyzing the entire network as a single large, lumped system, we model the network interconnections with integral quadratic…
Empirical diagnosis of stability has received considerable attention, mostly focused on variance metrics for early warning signals of abrupt system change. Despite this, the theoretical foundation and application has been limited to…
Current business cycle theory is an application of the general equilibrium theory. This paper presents the business cycle model without using general equilibrium framework. We treat agents risk assessments as their coordinates x on economic…
We study the out of equilibrium dynamics of an elastic manifold in a random potential using mean-field theory. We find two asymptotic time regimes: (i) stationary dynamics, (ii) slow aging dynamics with violation of equilibrium theorems. We…