Related papers: Technological Innovation and Bursting Bubbles
We argue that the present crisis and stalling economy continuing since 2007 are rooted in the delusionary belief in policies based on a "perpetual money machine" type of thinking. We document strong evidence that, since the early 1980s,…
We investigate knowledge exchange among commercial organisations, the rationale behind it and its effects on the market. Knowledge exchange is known to be beneficial for industry, but in order to explain it, authors have used high level…
The field of weather and climate science is at a pivotal moment, defined by the dual forces of unprecedented technological advancement. While a shifting research and employment landscape has created career uncertainty, leading to a…
We have used agent-based modeling as our numerical method to artificially simulate a dynamic real economy where agents are rational maximizers of an objective function of Cobb-Douglas type. The economy is characterised by heterogeneous…
In this letter we present a stochastic dynamic model which can explain economic cycles. We show that the macroscopic description yields a complex dynamical landscape consisting of multiple stable fixed points, each corresponding to a split…
Technological cumulativeness is considered one of the main mechanisms for technological progress, yet its exact meaning and dynamics often remain unclear. To develop a better understanding of this mechanism we approach a technology as a…
Using time series of US patents per million inhabitants, knowledge-generating cycles can be distinguished. These cycles partly coincide with Kondratieff long waves. The changes in the slopes between them indicate discontinuities in the…
This paper proposes a simple and parsimonious discrete-time simulation model to describe the endogenous formation and periodic collapse of financial bubbles. While existing literature has extensively explored the statistical properties of…
Technology was created to support and grow Business. Modern business that uses technology efficiently, grows at a phenomenal rate (Statista.com, 2018). The assumption therefore is that businesses that utilize insufficient technology, or use…
Many complex systems exhibit extreme events far more often than expected for a normal distribution. This work examines how self-similar bursts of activity across several orders of magnitude can emerge from first principles in systems that…
Functional technical performance usually follows an exponential dependence on time but the rate of change (the exponent) varies greatly among technological domains. This paper presents a simple model that provides an explanatory foundation…
Large variations in stock prices happen with sufficient frequency to raise doubts about existing models, which all fail to account for non-Gaussian statistics. We construct simple models of a stock market, and argue that the large…
We study a model of innovation with a large number of firms that create new technologies by combining several discrete ideas. These ideas are created via private investment and spread between firms. Firms face a choice between secrecy,…
This paper studies the response of stock markets relative to the banking sector to innovation by using a panel of 75 countries from 1982 to 2021. We find that innovation increases the activity, efficiency and size of stock markets relative…
Standard economic theory assumes that agents in markets behave rationally. However, the observation of extremely large fluctuations in the price of financial assets that are not correlated to changes in their fundamental value, as well as…
The development of inventions is theorized as a process of searching and recombining existing knowledge components. Previous studies under this theory have examined myriad characteristics of recombined knowledge and their performance…
We define and study a rather complex market model, inspired from the Santa Fe artificial market and the Minority Game. Agents have different strategies among which they can choose, according to their relative profitability, with the…
In this paper, making use of recent statistical physics techniques and models, we address the specific role of randomness in financial markets, both at the micro and the macro level. In particular, we review some recent results obtained…
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…
We present results on simulations of a stock market with heterogeneous, cumulative information setup. We find a non-monotonic behaviour of traders' returns as a function of their information level. Particularly, the average informed agents…