Power Dynamics: Multiple Equilibria, Cyclical Fluctuations, and Local Stability in Intertemporal General Equilibrium Models

Abstract

Based on the theory of power proposed by John Galbraith, Bertrand Russell and other social scientists, this paper offers two positive intertemporal general equilibrium models to understand: i.) How do rational people decide their optimal consumption, property accumulation, and power? ii.)What causes people to choose different growth path of power? iii.)Why would two people, whose power and wealth endowment levels are quite close, differ so drastically in their future practice? iv.) Why could the rational pursue of power in a "perfect" world is compatible with cyclical power patterns? The simple two-dimensional model considers the dynamic property of power. The second model is an extension of the first model, and analyses the wealth effect on power accumulation. Numerical simulations have provided strong support for our modeling approaches.Power, Stable limit cycles, Hopf bifurcation, Multiple equilibria