Related papers: A solution for external costs beyond negotiation a…
We model an informed agent with information about the future value of an asset trying to maximize profits when subjected to a transaction cost as well as a market maker tasked with setting fair transaction prices. In a single auction model,…
Entropy based ideas find wide-ranging applications in finance for calibrating models of portfolio risk as well as options pricing. The abstracted problem, extensively studied in the literature, corresponds to finding a probability measure…
The paper argues that attracting more economists and adopting a more-precise definition of dynamic complexity might help econophysics acquire more attention in the economics community and bring new lymph to economic research. It may be…
How do cost shocks pass through to prices in markets with price dispersion? We decompose the problem into two layers. In the competition layer, consumers' consideration sets determine equilibrium distributions of normalized margins. In the…
We consider the problem of reducing the carbon emissions of a set of firms over a finite horizon. A regulator dynamically allocates emission allowances to each firm. Firms face idiosyncratic as well as common economic shocks on emissions,…
Simulation serves as a third way of doing science, in contrast to both induction and deduction. The web based modeling may considerably facilitate the execution of simulations by other people. We present examples of agent-based and…
Some results on cross-diffusion systems with entropy structure are reviewed. The focus is on local-in-time existence results for general systems with normally elliptic diffusion operators, due to Amann, and global-in-time existence theorems…
The purpose of the paper is to introduce a new approach of planning called Assumption-Based Planning. This approach is a very interesting way to devise a planner based on a multi-agent system in which the production of a global shared plan…
The impact of energy production significantly affects system sustainability, which has enabled a shift towards renewable energy sources. Thus, producer behavior is crucial in electricity markets to achieve sustainability goals. In this…
Even today, the concept of entropy is perceived by many as quite obscure. The main difficulty is analyzed as being fundamentally due to the subjectivity and anthropocentrism of the concept that prevent us to have a sufficient distance to…
The proposed framework introduces a novel multidimensional representation of money using tensor analysis, enabling a more granular examination of economic interactions and capital flow. By treating money as a multidimensional entity, this…
Recent antitrust regulations in several countries have granted exemptions for collusion aimed at achieving environmental goals. Firms can apply for exemptions if collusion helps to develop or to implement costly clean technology,…
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…
We introduce an extension of the concept of renormalised solutions for entropy-dissipating reaction-diffusion systems due to J. Fischer (Arch. Ration. Mech. Anal. 218, 2015) to systems coupled by nonlinear interface conditions. For this…
Empirical evidence suggests that even the most competitive markets are not strictly efficient. Price histories can be used to predict near future returns with a probability better than random chance. Many markets can be considered as {\it…
In the presence of non-convexities, the power market may not have an equilibrium price for power that provides economic stability of the centralized dispatch outcome. In this case, to achieve an economically stable outcome, the uplift…
Great socio-economic transitions see the demise of certain industries and the rise of others. The losers of the transition tend to deploy a variety of tactics to obstruct change. We develop a political-economy model of interest group…
We explore the effects of social influence in a simple market model in which a large number of agents face a binary choice: 'to buy/not to buy' a single unit of a product at a price posted by a single seller (the monopoly case). We consider…
We present an open-source Python framework for modelling cascading physical climate risk in a spatial supply-chain economy. The framework integrates geospatial flood hazards with an agent-based model of firms and households, enabling…
A one-size-fits-all paradigm that only adapts the scale and immediate outcome of climate investment to economic circumstances will provide a short-lived, economically inadequate response to climate issues; given the limited resources…