The biological determinants of long-wave behavior in socioeconomic growth and development

In this paper, it is claimed that the effective causality of long-term macroeconomic rhythms, most commonly referred to as long waves or Kondratieff waves, is founded in our biological realm. The observed patterns of regularity in human affairs, manifest as socioeconomic rhythms and recurrent phenomena, are constrained and codetermined by our natural human biological clocks, themselves the result of instructions impressed in the human genome and human cognitive capacity by the physical regularity of fixed cosmic cycles. Considering that a long wave can be conceived as an evolving learning dissipative structure consisting of two successive logistic structural cycles, an innovation cycle and a consolidation cycle, and applying considerations from population dynamics, chaos theory and logistic growth dynamics, a Generational-Learning Model is proposed that permits comprehension of the unfolding and time duration of the phenomenon. The proposed model is based on two kinds of biological constraints that impose the rhythm of collective human behavior — generational and cognitive. The generational consist of biologically based rhythms, namely, the Aggregate Virtual Working Life Tenure and the Aggregate Female Fecundity Interval, both subsets of the normative human life span or human life cycle. The cognitive consist of a limiting learning growth rate, manifest in the alternating sequence of two succeeding learning phases, a new knowledge phase and a consolidation phase. It is proposed that the syncopated beats of succeeding effective generational waves and the dynamics of the learning processes determine the long-wave behavior of socioeconomic growth and development. From the relationship between the differential and the discrete logistic equations, it is demonstrated that the unfolding of each structural cycle of a long wave is controlled by two parameters: the diffusion-learning rate δ and the aggregate effective generation t_G, whose product maintained in the interval 3<δt_G<4 (deterministic chaos) grants the evolution and performance of social systems. Moreover, it is speculated that the triggering mechanism of this long-term swinging behavior may result from the cohesion loss of a given technoeconomic system in consequence of reaching a threshold value of informational entropy production.     

Polynomial innovation diffusion models

In an earlier paper [42] the authors presented a comprehensive evaluation and extensions of available causal models of “binomial type” for describing the time pattern of the innovation diffusion processes. The binomial models are based on the assumption that the entire population can be divided into two groups—adopters of an innovation and the potential adopters—such that eventually everyone adopts the innovation and an innovation once adopted is never rejected. However, many examples can be cited where this assumption is unrealistic. Therefore this paper presents some polynomial innovation diffusion models that are less restrictive compared with the binomial models. The paper also shows the link between the polynomial diffusion process and the multilevel technological substitution process.     

Transient and asymptotic dynamics of reinforcement learning in games

Reinforcement learners tend to repeat actions that led to satisfactory outcomes in the past, and avoid choices that resulted in unsatisfactory experiences. This behavior is one of the most widespread adaptation mechanisms in nature. In this paper we fully characterize the dynamics of one of the best known stochastic models of reinforcement learning [Bush, R., Mosteller, F., 1955. Stochastic Models of Learning. Wiley & Sons, New York] for 2-player 2-strategy games. We also provide some extensions for more general games and for a wider class of learning algorithms. Specifically, it is shown that the transient dynamics of Bush and Mosteller's model can be substantially different from its asymptotic behavior. It is also demonstrated that in general—and in sharp contrast to other reinforcement learning models in the literature—the asymptotic dynamics of Bush and Mosteller's model cannot be approximated using the continuous time limit version of its expected motion.     

Is error learning behaviour stabilizing?

It is very commonly admitted that error-learning behaviour in general improves the stability of dynamical economic evolutions. We show here, in the context of Temporary General Equilibrium Theory, that such an intuition is not true, in the sense that “most often,” for a large class of models, learning does not assuredly leads to more stable dynamics. The presentation of the problem then allows for a discussion of the type of hypothesis—very high levels of information or very careful behaviours—which can invalidate such a conclusion.     

Knowledge, economic structure, and growth

This paper proposes a two-sector growth model to examine the dynamic interactional relationships between capital and knowledge. The economy consists of two production sectors—industry and service—and one knowledge production sector—research institutions and universities. The university is financially supported by the government by taxing the service and industrial sectors. We provide a compact framework for analyzing the interactions of the three sectors with a given population and a fixed preference structure of the population. The model also determines the dynamics of the price of the industrial good, the wage rate, and the interest rate. First, we guarantee the existence of equilibria and provide the stability conditions. Then, we examine the effects of changes in the government's research policy and some other parameters upon the system.     

基于系统动力学模型的量水发展模式研究——以新疆为例

长期以来新疆受到水资源短缺的困扰,研究水资源能够承载的最佳且可持续的经济社会发展模式成为当前亟待解决的问题。构建新疆15个行政区域能够反映水资源供需状况的系统动力学模型,对经济、人口及城镇化的高速、中速及低速发展模式进行情景模拟分析。结果显示,伊犁哈萨克自治州、塔城地区、阿勒泰地区、博尔塔拉蒙古自治州、巴音郭楞蒙古自治州、克孜勒苏柯尔克孜自治州等6个行政区域现有水资源量能够支撑未来经济社会的高速发展模式。乌鲁木齐市、吐鲁番市、哈密市、昌吉回族自治州、阿克苏地区、喀什地区、和田地区等7个行政区域的现有水资源量可以支撑未来经济社会的中速发展模式。克拉玛依市和石河子市适合经济、人口和城镇化的低速发展模式,但认为可以通过区内调配的方式实现经济社会的中速发展模式。最后,提出相关政策及建议。     

Conjectural-variation models and supergames with price competition in a differentiated product oligopoly

Conjectural-variation models (CV models) are popular in empirical research as they infer the degree of market power from real data. Theorists of industrial organization, however, disapprove of them for lack of theoretical foundation arguing that dynamic reactions are forced into a static model with the strategy space and time horizon only loosely defined. The presented model follows an idea put forward by Cabral (1995) and demonstrates that the CV model can be interpreted as the joint-profit-maximizing steady-state reduced form of a price-setting supergame in a differentiated product market under optimal punishment strategies. For the symmetric two-firm case the CV parameter is shown to cover the full range of possible outcomes — from Bertrand competition to joint unconstrained monopoly — depending on the degree of product differentiation, market growth, bankruptcy risk, and the discount rate. For the asymmetric-cost case numerical calculations are provided.     

Interstate switched access demand analysis

The breakup of the Bell System in 1984 led to the adoption by the Federal Communications Commission of a system of tariff charges that are paid to local exchange carriers by business and residential telephone subscribers, and interexchange carriers such as AT&T. These charges are designed to recover the costs associated with providing access to the public switched network to complete interstate calls. This system is known as the FCC Access Charge Plan. Flat-rate fees, named Subscriber Line Charges, are imposed on telephone subscribers, while usage-based charges are billed to interexchange carriers. These are called Carrier Common Line and Traffic Sensitive rates. Since CCL and TS rates are based on network usage, forecasts of switched access demand are required to set them properly.This paper presents an econometric model of interstate switched access demand developed and utilized by AT&T to produce forecasts of 1988 demand in connection with the Annual 1988 Access Tariff Filings. The model is estimated in a state-level pooled cross-sectional time-series framework, with dynamics introduced via polynomial distributed lags on price and income. It represents an extension of the econometric demand model developed and used by the FCC a year earlier to determine a reasonable forecast of 1987 Carrier Common Line switched access demand. Estimated demand elasticities and forecasts are provided. The model forecasts are also compared to those from other models.     

The Japanese institutional mechanisms for industrial growth: A systems perspective—Part I

The two-part article focuses on the unique institutional setting which has enabled Japan to become a leader in rapid technology-based industrial growth. The innovation systems of the United States and Japan are compared. Three cases—fuzzy logic, active matrix crystal displays, and virtual reality—are examined. The underlying systemic characteristics are then probed.     

The econometric challenge to system dynamics and vice versa: Some future perspectives

In the last years, there have been some attempts to compare different approaches for dynamic modeling of socioeconomic systems and to suggest guidelines for choosing among them. This paper continues these efforts with special emphasis on system dynamics and econometrics, which are commonly regarded as the roughest competitors in this field of simulation. It will present a detailed catalogue of model features, relevant for an adequate characterization of system dynamics and econometrics, and will stress the importance to notice the interconnections that exist between different features. The paper then gives a systematic survey of the conceivable relations between system dynamics and econometrics, and closes with a short epistemological outlook.     

Technology, productivity, and organization

The on-coming age of changing technology and knowledge intensification, and its interactions with human values are expected to bring forth fundamental shifts in socioeconomic environment. The paper presents an overview of the dynamics of technological change, a hypothesis on productivity dynamics, and likely shifts in organizational structure. To cope with changes, organizational productivity has to be increasingly governed by human creativity and managerial effectiveness. The structure will be flatter, action-oriented, entrepreneurial, and, above all, flexible. By being organically alive, it will be different from conventional mechanical setups. The future will witness more of flexible manufacturing and flexible management systems and a change of emphasis from “management of technology” to “management of change”, governed by a multiperspective vision. The paper also analyzes major problems likely to be faced by developing countries in getting prepared for the future. In addition to their current focus on technological aspects, the Third World countries have to be seriously concerned about people and organizational issues.     

Analysis of the Lotka-Volterra competition equations as a technological substitution model

This paper provides insight into the dynamics of the Lotka-Volterra competition (LVC) equations, a much used competition model, and compares the dynamics of LVC competitive substitution to that of several well-known substitution models. The behavior of the LVC equations is analyzed for the special case of a dominant competitor at equilibrium being replaced after the introduction of a small population of an invading competitor with a competitive advantage. Expressions are derived that describe the growth of the invading competitor and that growth is shown to be of four classes: left asymmetric, logistic, right asymmetric with 1−ε₂ asymptote and right asymmetric with γ asymptote. It is shown that the LVC model reverts to logistic substitution in a market of fixed size, a result with important implications. The LVC equations are fitted to the Gompertz, Bass, Non-Symmetrical Responding Logistic (NSRL) and Sharif-Kabir substitution models and compared using a novel graphical technique. The LVC equations can reasonably mimic the full range of curve shapes exhibited by each of these models.     

Toward improved and practical incentive regulation

The first half of this paper overviews traditional methods of ratemaking—embedded and marginal cost pricing—and four recent alternatives—automatic rate adjustments, profit-sharing, tariff menus, and the Vogelsang-Finsinger convergence mechanism—that have come to challenge them. We develop a list of nine desirable properties that are suitable to gauge any regulatory mechanism. In the second half of the paper, we explore in greater detail two recent incentive plans—the FCC's price caps approach and a mechanism that the three authors proposed in a FERC document. Based on the nine properties, these two mechanisms are compared.     

Comparative Learning Dynamics*

We study economic environments in which agents make choices on the basis of relative performance criteria and call the associated class of dynamic adjustment rules comparative dynamics. We distinguish two classes of learning behavior: learning from the population experience (imitative dynamics) and learning only from one's own experience (introspective dynamics). Paradoxically, for a broad class of models, comparing stochastically stable states across dynamics, agent payoffs are lower for imitative than introspective dynamics—mimicking best practice in the population is counterproductive.     

A new method of evaluating the accuracy of economic forecasts

Conventional measures of forecasting accuracy reflect the view that forecast evaluation should concentrate on all large disturbances and ignore turning-point errors. Many forecasters, however, believe missed turns are the most grievous of all forecasting errors. Despite this consensus, no generally acceptable measure of this type of forecasting error exists. In this paper, such a measure—the probability of correctly forecasting directional change—is introduced. Values of this measure are computed for eleven well-known macroeconometric forecasting models. An inequality-type index of relative directional accuracy based on this measure is also presented and used to evaluate the models in terms of their relative accuracy.     

Melioration learning in games with constant and frequency-dependent pay-offs

The paper explores the implications of melioration learning—an empirically significant variant of reinforcement learning—for game theory. We show that in games with invariable pay-offs melioration learning converges to Nash equilibria in a way similar to the replicator dynamics. Since melioration learning is known to deviate from optimizing behavior when an action’s rewards decrease with increasing relative frequency of that action, we also investigate an example of a game with frequency-dependent pay-offs. Interactive melioration learning is then still appropriately described by the replicator dynamics, but it indeed deviates from rational choice behavior in such a game.     

Socioeconomic dimensions of mercury pollution abatement: Engaging artisanal mining communities in Sub-Saharan Africa

In recent years, strategies to tackle mercury pollution from artisanal gold mining have mainly included restrictions — banning mercury trade internationally, prescribing alternate technologies and tightening regulations on mining (e.g. banning mercury use). However, artisanal mining communities in Africa are often trapped in cycles of poverty that make it difficult for workers to improve technologies and reduce mercury pollution. This article assesses problems with narrow pollution abatement discourses and top-down regulations, examining the need for integrated approaches to address pollution and socioeconomic challenges in low income mining communities. It advances the hypothesis that pollution abatement strategies fail if they do not explicitly address local socioeconomic capacities for improving environmental management, informed by an adaptive understanding of labor dynamics. Case studies in Mozambique and Tanzania are examined where United Nations pilot projects sought to address local challenges. These combined training on improved technologies and environmental risk mitigation with efforts to empower miners by enhancing access to microfinance services and fairer gold marketing arrangements. These case studies demonstrate adaptive ways of engaging local concerns in mining areas, highlighting lessons that are especially urgent now that recent policy commitments from Europe and the United States to ban mercury exports have specifically sought to make mercury more expensive for African mining communities. Ultimately, the analysis suggests how regionally focused ecological economics research has a vital role to play in (a) revealing how narrowly conceived responses to pollution can yield counterproductive results as well as exacerbate exploitative labor conditions in low income contexts; and (b) stimulating analytic focus on innovative ways of integrating pollution reduction strategy with grassroots socioeconomic empowerment strategies.     

Heuristic modeling and technological impact analysis

This article examines the ways in which a financial simulation can be used to estimate the impact of an organization's technological environment on the financial, marketing, and logistical activities of the organization. A method is presented for using corporate financial models to perform technological impact analysis and a new technique introduced—heuristic modeling—that can facilitate such an analysis.     

Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach

A finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity. The model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists. The basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip, aswell as their stated preferences overwilderness park attributes. The econometricanalysis suggested that four classes of peopleexist in the sample. Using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model, and provided insight into thedifferential impact of alternative policies.