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Title: Out-of-equilibrium economic dynamics and persistent polarisation
Author: Porter, James A.
ISNI:       0000 0004 2748 8261
Awarding Body: University of Warwick
Current Institution: University of Warwick
Date of Award: 2012
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Most of economics is equilibrium economics of one sort or another. The study of outof- equilibrium economics has largely been neglected. This thesis, engaging with ideas and techniques from complexity science, develops frameworks and tools for out-of-equilibrium modelling. We initially focus our attention on models of exchange before examining methods of agent-based modelling. Finally we look at a set of models for social dynamics with nontrivial micro-macro interrelationships. Chapter 2 introduces complexity science and relevant economic concepts. In particular we examine the idea of complex adaptive systems, the application of complexity to economics, some key ideas from microeconomics, agent-based modelling and models of segregation and/or polarisation. Chapter 3 develops an out-of-equilibrium, fully decentralised model of bilateral exchange. Initially we study the limiting properties of our out-of-equilibrium dynamic, characterising the conditions required for convergence to pairwise and Pareto optimal allocation sets. We illustrate problems that can arise for a rigid version of the model and show how even a small amount of experimentation can overcome these. We investigate the model numerically characterising the speed of convergence and changes in ex post wealth. In chapter 4 we now explicitly model the trading structure on a network. We derive analytical results for this general network case. We investigate the e�ect of network structure on outcomes numerically and contrast the results with the fully connected case of chapter 3. We look at extensions of the model including a version with an endogenous network structure and a versions where agents can learn to accept a `worthless' but widely available good in exchanges. Chapter 5 outlines and demonstrates a new approach to agent-based modelling which draws on a number techniques from contemporary software engineering. We develop a prototype framework to illustrate how the ideas might be applied in practice in order to address methodological gaps in many current approaches. We develop example agent-based models and contrast the approach with existing agent-based modelling approaches and the kind of purpose built models which were used for the numerical results in chapters 3 and 4. Chapter 6 develops a new set of models for thinking about a wide range of social dynamics issues including human capital acquisition and migration. We analyse the models initially from a Nash equilibrium perspective. Both continuum and �nite versions of the model are developed and related. Using the criterion of stochastic stability we think about the long run behaviour of a version of the model. We introduce agent heterogeneity into the model. We conclude with a fully dynamic version of the model (using techniques from chapter 5) which looks at endogenous segregation.
Supervisor: Not available Sponsor: Engineering and Physical Sciences Research Council (EPSRC)
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: HB Economic Theory ; QA76 Electronic computers. Computer science. Computer software