A spectrum of equilibration processes in game theory

In game theory, four dynamic processes converging towards an equilibrium are distinguished and ordered by way of agents' decreasing cognitive capacities. In the eductive process, each player has enough information to simulate perfectly the others' behavior and gets immediately to the equilibrium. In epistemic learning, each player updates his beliefs about others' future strategies, with regard to their sequentially observed actions. In behavioral learning, each player modifies his own strategies according to the observed payoffs obtained from his past actions. In the evolutionary process, each agent has a fixed strategy and reproduces in proportion to the utilities obtained through stochastic interactions. All along the spectrum, longer term dynamics makes up for weaker rationality, and physical relations substitute for mental interactions. Convergence, if any, is towards an always stronger equilibrium notion and selection of an equilibrium state becomes more sensitive to context and history. The processes can be mixed if associated to different periods, agents or mechanisms and deepened if obtained by formal reasoning principles.     

The future of work: An outline of a method for scenario construction

The nature of work may be described at two levels : the social and the individual. The author identifies four scenarios at each level and is thus able to generate a total of 16 combined scenarios. Of these, four are shown to be the most probable and the author compares them with similar scenarios previously mentioned in the literature.     

Autocorrelation of the trade process: Evidence from the Helsinki Stock Exchange

This study investigates how duration-based trading intensity modifies the first-order autocorrelation and the transitory variance of the trade process. Because prices are conditional expected values, a structural model in which the trade duration represents the rate at which prices incorporate new information is developed. This refined model is an extension of the one developed by Madhavan, Richardson, and Roomans (1997) and allows parameters characterizing the arrival rate of new information to be derived. Testing this model with data from the Helsinki Stock Exchange, I was able to determine that a model ignoring trading intensity effects on price changes would underestimate the transitory effects of the trade process. This finding suggests that trade duration captures neglected elements of implicit trading costs that increase with market microstructure effects.     

Quantifying economic sustainability: Implications for free-enterprise theory, policy and practice

In a previous paper (Ulanowicz, Goerner, Lietaer, and Gomez, 2009), we combined thermodynamic, network, and information theoretic measures with research on real-life ecosystems to create a generalized, quantitative measure of sustainability for any complex, matter/energy flow system. The current paper explores how this metric and its related concepts can be used to provide a new narrative for long-term economic health and sustainability. Based on a system's ability to maintain a crucial balance between two equally essential, but complementary factors, resilience and efficiency, this generic explanation of the network structure needed to maintain long-term robustness provides the missing theoretical explanation for what constitutes healthy development and the mathematical means to differentiate it quantitatively from mere growth. Matching long-standing observations of sustainable vitality in natural ecosystems and living organisms, the result is a much clearer, more accurate understanding of the conditions needed for free-enterprise networks to produce the kind of sustainable vitality everyone desires, one which enhances and reliably maintains the health and well-being of all levels of global civilization as well as the planet.     

Elimination of arbitrage states in asymmetric information models

In a financial economy with asymmetric information and incomplete markets, we study how agents, having no model of how equilibrium prices are determined, may still refine their information by eliminating sequentially “arbitrage state(s)”, namely, the state(s) which would grant the agent an arbitrage, if realizable.      

Implementing sustainable tourism in Scotland: an interview

In China, sites categorised as UNESCO World Heritage Sites are commonly used as a means of economic regeneration through tourism development. This study is of a recent addition to the list, the diaolou (fortified tower houses) of Kaiping, Guangdong, in South China. This rural zone, characterised by past emigration and farming, is in the early stages of tourism development. The study, based on interviews and a survey, permits findings to be compared with other rural areas in China such as Hungcun and the Tangyue Arches of Bao Village in Anhui, and thus while similarities in attitudes are found, in Kaiping differences exist whereby tourism has been found to permit entrepreneurial activities while retaining an agricultural base as the “new tourism rich” employ others to continue farming. The work is contextualised within a model of evolving literature related to tourism impacts on communities. The paper explores a range of issues in sustainable tourism, including the use of tourism as a tool for social, economic and cultural development, holistic approaches to heritage tourism, and the development of glocalisation as a response to globalisation. It discusses differences in approach to heritage tourism, cultural change and commodification between western and Chinese scholars and society.     

Electrification,the Smoot-Hawley Tariff Act and the Decline in Investment Expenditure in 1931–1932: Testing the Excess-Capacity Hypothesis

Beaudreau (1996) argued that the decline in investment expenditure in the early 1930s was the result of two factors, namely the electrification of U.S. manufacturing in the 1910s and 1920s which had resulted in significant excess capacity, and secondly, to the failure of the Smoot-Hawley Tariff Bill in October 1929 to be passed by the Senate, resulting in (i) the Stock Market Crash in October 1929 and (ii) the ensuing precipitous decline in investment expenditure which touched off the Great Depression. In short, the manufacturing sector in the late 1920s found itself with excess capacity, prompting Senator Reed Smoot and the Republican Party to propose another upward revision of the tariff schedule. The failure to deliver on this promise led to the Crash and the ensuing decline in investment expenditure, the cumulative effect of which led to the Great Depression. This paper tests this hypothesis using two-digit industry investment data. As electrification varied considerably across industries it would stand to reason that sectors that electrified the most would have witnessed the largest decreases in investment expenditure (plant and equipment), owing to the presence of excess capacity. The results confirm this hypothesis, leading us to conclude that electrification-based excess capacity may have been an important cause of the downturn in 1930 and 1931.