Related papers: Potterian Economics
It is widely assumed that increases in economic productivity necessarily lead to economic growth. In this paper, it is shown that this is not always the case. An idealized model of an economy is presented in which a new technology allows…
Individuals are often influenced by the behavior of others, for instance because they wish to obtain the benefits of coordinated actions or infer otherwise inaccessible information. In such situations this social influence decreases the ex…
The origins of economic behavior remain unresolved-not only in the social sciences but also in AI, where dominant theories often rely on predefined incentives or institutional assumptions. Contrary to the longstanding myth of barter as the…
Financial markets provide a natural quantitative lab for understanding some of the most advanced human behaviours. Among them is the use of mathematical tools known as financial instruments. Besides money, the two most fundamental financial…
Much of economic theory is built on observations of aggregate, rather than individual, behavior. Here, we present novel findings on human shopping patterns at the resolution of a single purchase. Our results suggest that much of our…
The state of economic theory and accumulated facts from the different branches of the economic science require to analyze the concept of the description of economy systems. The economic reality generates the problems the solution of that is…
Despite more than 50 years of human space exploration, no paper in the field of economics has been published regarding the theory of a space-based economy. The aim of this paper is to develop quantitative techniques to estimate conditions…
In both finance and economics, quantitative models are usually studied as isolated mathematical objects --- most often defined by very strong simplifying assumptions concerning rationality, efficiency and the existence of disequilibrium…
A stylized experiment, the public goods game, has taught us the peculiar reproducible fact that humans tend to contribute more to shared resources than expected from economically rational assumptions. There have been two competing…
Wisdom of crowds refers to the phenomenon that the aggregate prediction or forecast of a group of individuals can be surprisingly more accurate than most individuals in the group, and sometimes - than any of the individuals comprising it.…
Prices in financial markets exhibit extreme jumps far more often than can be accounted for by external news. Further, magnitudes of price changes are correlated over long times. These so called stylized facts are quantified by scaling laws…
The Fourth Industrial Revolution commonly refers to the accelerating technological transformation that has been taking place in the 21st century. Economic growth theories which treat the accumulation of knowledge and its effect on…
Financial models do not merely analyse markets, but actively shape them. This effect, known as performativity, describes how financial theories and the subsequent actions based on them influence market processes, by creating self-fulfilling…
This research paper explores the impact of Artificial intelligence (AI) on the global economy, with particular emphasis on its influence on gross domestic product (GDP). The paper begins with an overview of AI, followed by a discussion of…
Opinion dynamics have fascinated researchers for centuries. The ability of societies to learn as well as the emergence of irrational {\it herding} are equally evident. The simplest example is that of agents that have to determine a binary…
We study the role of imitation within a model of economics with adaptive agents. The basic ingredients are those of the Minority Game. We add the possibility of local information exchange and imitation of the neighbour's strategy. Imitators…
People sometimes change their opinions when they discuss things with other people. Researchers can use mathematics to study opinion changes in simplifications of real-life situations. These simplified settings, which are examples of…
We conduct a field experiment on a movie-recommendation platform to investigate whether and how online recommendations influence consumption choices. Using a within-subjects design, our experiment measures the causal effect of…
As a firm varies the price of a product, consumers exhibit reference effects, making purchase decisions based not only on the prevailing price but also the product's price history. We consider the problem of learning such behavioral…
We study the societal impact of pseudo-scientific assumptions for predicting the behavior of people in a straightforward application of machine learning to risk prediction in financial lending. This use case also exemplifies the impact of…