Porter, James A. (2012) Out-of-equilibrium economic dynamics and persistent polarisation. PhD thesis, University of Warwick.

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Abstract

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.

Item Type:	Thesis (PhD)
Subjects:	H Social Sciences > HB Economic Theory Q Science > QA Mathematics > QA76 Electronic computers. Computer science. Computer software
Library of Congress Subject Headings (LCSH):	Equilibrium (Economics) -- Computer simulation, Multiagent systems
Official Date:	December 2012
Dates:	Date Event December 2012 Submitted
Institution:	University of Warwick
Theses Department:	Centre for Complexity Science
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Ghosal, Sayantan
Sponsors:	Engineering and Physical Sciences Research Council (EPSRC)
Extent:	xi, 187 leaves : illustrations.
Language:	eng

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