All -
Apropos some of this, there are notes from lectures I've given
recently on some of these topics here:
Math Club lecture (including some discussion of the "wealth
model," and some "power laws" discussion)
Black-Scholes/High Finance
Random Walks
tom
On Apr 12, 2009, at 11:16 AM, Stephen Guerin wrote:
Russ writes:
there are N agents; N resources are needed for survival. So if the
aggregate production is evenly distributed everyone has a
subsistence living.
I don't think this is necessarily true.
Your mentioning a gift economy is further a reason to look at a
model as simple as the Tom Carter/Victor Yakovenko model I mentioned
where agents are giving a dollar to another random agent (ie
gifting). This model, with minimal assumptions, generates non-
equitable distribution of wealth where very few agents end up
holding most of the wealth (Boltzmann distribution) even though the
average wealth in the model is unchanged at $50/agent.
The important constraint in the model is that agents can only have
positive amounts of cash/goods -- they can't gift a dollar they
don't have.
Just as energy distributes itself as a boltzmann distribution as
particles can not have less than zero energy after a collision
(transaction). Basically we have diffusion against a wall in both
models. Of course we can introduce debt and progressive taxes to the
economic model to mess with the dynamics, but I think it's important
to recognize the non-equity is there from the beginning with very
minimal assumptions. Note that the wealthy agents do turnover in
this model so the definition of what is equitable is important.
-Steve
On Apr 12, 2009, at 11:40 AM, Russ Abbott wrote:
Thanks for all the responses. What prompted my question was
thinking about the "end state" of the current financial crisis.
The question is: what does a successful stable economy look like?
Only secondarily was I asking about markets, wealth distribution
across society, etc., which is what many of the existing models
focus on.
In attempting to describe the foundations of a stable economy I was
making the following assumptions.
• We live off the gift of free energy -- the sun. So in some sense
a stable economy requires little more than harvesting that energy.
• As human beings we have the innate (i.e., also free) ability to
transform that energy into other forms that we need. For example,
most of us on this list are capable of writing code. I'm taking
skills like that as more free gifts from nature. Yes, it requires,
education, study, practice, etc., but ultimately it grows out of
our being alive, a free gift.
• In talking about "free gifts" from nature, I'm not trying to be
spiritual, new age-y, etc. It just seems to me to be the way the
world works. So I'm willing to build it into the model.
• But, even though we live off these free gifts, we all need
energy to survive. If you look at my "Reductionist blind spot"
paper, you see that we are what I call dynamic entities. Dynamic
entities need to import externally supplied energy to persist -- in
our case food, at least. So even though we find ourselves in a
world in which there is externally supplied energy available to be
imported (from the sun and its stored versions), we are each still
required to do something to import it for ourselves. That is, we
must each work for a living.
• Presumably a standard economic model says that we live at a
subsistence level if the amount of work we do matches our needs. If
I spend all my working hours doing nothing more than earning what I
need to survive, that's subsistence.
• I want to allow specialization so I suggested that each agent
specializes in producing some resource but that the aggregate
amount produced exactly satisfies the needs of the producers. That
is, each agent produces N units of his specialty resource; there
are N agents; N resources are needed for survival. So if the
aggregate production is evenly distributed everyone has a
subsistence living.
• A society/economy grows "richer" when it can produce enough
resources for itself without requiring everyone to work on
producing those resources. In that case, the available excess labor
can produce discretionary items, like art, pop music, software,
soft drinks, philosophy, etc.
• As technology advances a smaller and smaller percentage of the
population is needed to produce the necessities. The rest can spend
their time producing discretionary items.
• So at this point we are all well fed, and we are all willing to
spend our extra money supporting our local NPR stations.
• But what happens when there is shock to the economy and people
find that they have less "wealth" than they thought they had?
Presumably they will spend less on discretionary items, and the
people who create those items will be out of work. Where do we go
from there?
So I am looking for a model to explore these kinds of issues.
I must say that I'm surprised at the number of things I had to
write down to explain what I am after. I thought it would be
simpler. And I want something as simple as possible.
Any thoughts/suggestions?
-- Russ
On Sun, Apr 12, 2009 at 9:14 AM, Victoria Hughes <[email protected]
> wrote:
> Attention and action = the price to consume.
is it possible to have an idea / new information and not in some
way, internally or externally, react to it?
Memes spread. Humans by design infect each other on all levels.
The Complex seems like a great example: by definition intends to do
this.
Idea / attention / action-reaction / experience / new idea.
And so forth.
Am enjoying the bouncing of ideas and information in this
particular string...
Tory
On Apr 12, 2009, at 7:04 AM, Jochen Fromm wrote:
The central property which emerges in markets is
the price. The central law which rules markets is
the law of supply and demand. A basic agent-based
model for markets should explain how both, the
price and the law of supply and demand, emerge
in competitive markets. It should be simple to
extend such a model to explain bubbles and crashes.
As far as I know, there is no basic model of
markets in general, there are only agent based models
of specific markets, for example stock markets,
financial markets and electricity markets. Perhaps
the law of supply and demand is too simple to justify
such a model?
Epstein and Axtell's Sugarscape is a model where
agents begin to accumulate "wealth" in some form,
but it is more about evolution of societies and less
about market mechanisms and economies.
It would be interesting to apply a basic agent-based
market model to the society of mind. If we consider the
crowd within and the battle of ideas which is going on
inside our minds, can we create an agent-based model
to explain the 'market of information' ? We have a
demand for new or highly emotional stuff, are constantly
supplied with information from the outside, and the price
we have to pay to consume it is attention.
-J.
----- Original Message ----- From: Russ Abbott
To: The Friday Morning Applied Complexity Coffee Group
Sent: Sunday, April 12, 2009 9:00 AM
Subject: [FRIAM] Agent-based market models
Does anyone know of good examples of generic agent-based market
economies? I'm thinking of something as simple as this.
A population consists of agents each of which has certain
continuing needs (such as food, clothing, shelter, Internet
access, etc.) to survive. As a starting point, let's assume that
each agent needs one unit of each of N resources every time
period. Let's also assume that each agent is specialized and is
capable of creating enough of one of the needed resources to
satisfy the needs of N agents. (The fact that I used the same N in
both places was intentional.) To keep it simple let's assume that
these acts of creation occur from scratch, i.e., that the creator
doesn't need raw materials, that all that's necessary for an agent
to create a needed resource is that the agent be alive. The agents
presumably develop a barter economy, trading the resources they
create for the resources they need to stay alive. Perhaps markets
develop, and perhaps money develops. At this point the economy
should be fairly stable. Each agent creates enough stuff so that s/
he can trade it for what s/he needs to stay live.
Perhaps some of the agents learn how to be more efficient in
creating their resource and begin to accumulate "wealth" in some
form. Perhaps the agents have discretionary desires, which they
fill if they have enough resources left over after meeting their
basic needs. Perhaps there are communal services that are paid for
by taxes or memberships. This could become increasingly elaborate.
It seems to me that models of this sort must have been developed
-- perhaps many times. Does anyone know of any references to this
sort of work?
Thanks.
-- Russ Abbott
_____________________________________________
Professor, Computer Science
California State University, Los Angeles
o Check out my blog at http://bluecatblog.wordpress.com/
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FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
