Delayed information flow effect in economy systems. An ACP model study

Applying any strategy requires some knowledge about the past state of the system. Unfortunately in the case of economy collecting information is a difficult, expensive and time consuming process. Therefore the information about the system is known at the end of some well defined intervals, e. g. company reports, inflation data, GDP etc. They describe a (market) situation in the past. The time delay is specific to the market branch. It can be very short (e.g. stock market offer is updated every minute or so and this information is immediately available) or long, like months in the case of agricultural market, when the decisions are taken based on the results from the previous harvest. The analysis of the information flow delay can be based on the ACP model of spatial evolution of economic systems. The entities can move on a square lattice and when meeting take one of the two following decisions: merge or create a new entity. The decision is based on the system state, which is known with some time delay. The effect of system's feedback is investigated. We consider the case of company distribution evolution in a heterogenous field. The information flow time delay implies different final states, including cycles.Comment: Presented at APFA

Evolution of economic entities under heterogeneous political/environmental conditions within a Bak-Sneppen-like dynamics

A model for economic behavior, under heterogeneous spatial economic conditions is developed. The role of selection pressure in a Bak-Sneppen-like dynamics with entity diffusion on a lattice is studied by Monte-Carlo simulation taking into account business rule(s), like enterprise - enterprise short range location "interaction"(s), business plan(s) through spin-offs or merging and enterprise survival evolution law(s). It is numerically found that the model leads to a sort of phase transition for the fitness gap as a function of the selection pressure.Comment: 6 figures. to be published in Physica

Model of macroeconomic evolution in stable regionally dependent economic fields

We develop a model for the evolution of economic entities within a geographical type of framework. On a square symmetry lattice made of three (economic) regions, firms, described by a scalar fitness, are allowed to move, adapt, merge or create spin-offs under predetermined rules, in a space and time dependent economic environment. We only consider here one timely variation of the ''external economic field condition''. For the firm fitness evolution we take into account a constraint such that the disappearance of a firm modifies the fitness of nearest neighboring ones, as in Bak-Sneppen population fitness evolution model. The concentration of firms, the averaged fitness, the regional distribution of firms, and fitness for different time moments, the number of collapsed, merged and new firms as a function of time have been recorded and are discussed. Also the asymptotic values of the number of firms present in the three regions together with their average fitness, as well as the number of respective births and collapses in the three regions are examined. It appears that a sort of $critical$ selection pressure exists. A power law dependence, signature of self-critical organization is seen in the birth and collapse asymptotic values for a high selection pressure only. A lack of self-organization is also seen at region borders.Comment: 11 figures double columns on 7 page

Simple Model for the Dynamics of Correlations in the Evolution of Economic Entities Under Varying Economic Conditions

From some observations on economic behaviors, in particular changing economic conditions with time and space, we develop a very simple model for the evolution of economic entities within a geographical type of framework. We raise a few questions and attempt to investigate whether some of them can be tackled by our model. Several cases of interest are reported. It is found that the model even in its simple forms can lead to a large variety of situations, including: delocalization and cycles, but also pre-chaotic behavior.Comment: Presented at Bali IEC02 symposium, Aug. 2002; submitted to Physica A ; 8 pages, 5 figure

A logistic map approach to economic cycles I. The best adapted companies

A birth-death lattice gas model about the influence of an environment on the fitness and concentration evolution of economic entities is analytically examined. The model can be mapped onto a high order logistic map. The control parameter is a (scalar) "business plan". Conditions are searched for growth and decay processes, stable states, upper and lower bounds, bifurcations, periodic and chaotic solutions. The evolution equation of the economic population for the best fitted companies indicates "microscopic conditions" for cycling. The evolution of a dynamic exponent is shown as a function of the business plan parameters.Comment: 10 pages, 5 postscript figure

Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States

We present the data on wealth and income distributions in the United Kingdom, as well as on the income distributions in the individual states of the USA. In all of these data, we find that the great majority of population is described by an exponential distribution, whereas the high-end tail follows a power law. The distributions are characterized by a dimensional scale analogous to temperature. The values of temperature are determined for the UK and the USA, as well as for the individual states of the USA.Comment: 8 pages, 6 figures, elsart.cls. Submitted to Physica A, proceedings of NATO workshop Applications of Physics in Economic Modeling, Prague, February 2001. V.2: minor stylistic expansio

Firm growth and the illusion of randomness

This paper shows that randomness can be an artefact of the methods used to examine firm performance. It questions the recent equating of entrepreneurship with gambling based on the assumption of random firm performance. It shows that complexity science provides a useful alternative perspective on randomness in relation to firm performance