Information, Adaptive Contracting, and Distributional Dynamics: Bayesian Choice, Bose-Einstein Statistics and the Movies

Audiences discover what movies they like and spread the word. Information feedback produces Bose-Einstein dynamics in the motion picture box office revenue distribution. Information cascades generate box office `hits' (superstars) and `flops' (antistars). The revenue distribution evolves recursively over the `run' as a mixture of the `opening' and a stochastic competition among films. The motion picture run is decentralized, adaptive, and self- organizing: semi-stationary admission prices, local information, and contingency-rich contracts match the film rental price and the supply of theatrical engagements to demand.

Information, Bounded Rationality, and the Complexity of Economic Organization

An economic organization represents order and information. I define an economic organization to be a coalition of consistent multilateral contracts and develop measures of its complexity. I show that when a new organization is formed, information is created. I find there are information economies of scale to organizations and that the institutions of property rights and contracts underlie these economies. I also show that organizations that are optimal must contain unbounded information. This suggests that optimal organizations must be boundedly rational or formed by processes that are.