Peter S. Albin

Decentralized, dispersed exchange without an auctioneer: A simulation study☆

Abstract We stimulate exchange among geographically dispersed agents who face real costs of communication along with bounds to rationality and calculation. Exchange is entirely decentralized it is initiated by individual agents who broadcast costly messages indicating their interest in trade; it is accomplished by bilateral bargaining between pairs of agents; agents use the information gained from previous attempts at local trade to calculate their search strategies for succeeding rounds. This decentralized mechanism can achieve a substantial improvement in the allocation of resources and the average welfare of agents in comparison with a randomized initial endowment. But in comparison with Walrasian equilibrium agents who begin with endowments of equal value end up with substantially unequal wealth, although the initial inequality of utility is reduced.

The metalogic of economic predictions, calculations and propositions☆

Abstract Indeterminacy is a matter of concern in the analysis of ideal forms and this paper shows that Godel incompleteness and undecidability directly pertain to the analysis of theoretical economic systems - specifically, that certain solution concepts such as ‘predictions of characteristics of policy outcomes guided by a social welfare function’, ‘the existence of equilibrium’, ‘the existence of welfare optima’ are subject to Godel undecidability. This consideration brings into question the convention of a finite decision unit or economic actor, and the paper considers more-appropriate (metatheoretic) assumption structures and the implications of specifying richer information structures in microeconomics and choice theory.

Microeconomic foundations of cyclical irregularities or ‘chaos’

Abstract Phenomena described variously as pseudorandom, irregularly-cyclical, or chaotic can appear in comparatively-simple dynamic aggregate models. This paper takes a microeconomic perspective and examines conditions in the small which appear to underlie irregular behavior in the large. The point of departure is Days (1982a) nonlinear version of the neoclassical aggregate growth model which exhibits both conventional and irregular dynamics. The microeconomic approach, which employs one-dimensional cellular automata to simulate departures from equilibrium investment paths, yields information on the likely frequency of chaotic phenomena and on their expectational properties. In particu;ar, the automata-theoretic approach generates a rigorous and easily-applied classification scheme for dynamic systems and the data produced by them. It is shown that plausible variations in business behavior within a deterministic microeconomy support chaotic macrodynamics as well as two simpler types of behavior: uniformity over time and regular periodicity. A surprising result is the finding that the same economy can also produce a type of behavior that is qualitatively richer than chaos and far more interesting in its expectational and economic implications. The last phenomenon can manifest itself in aggregate data compiled from the micro-model as an apparent profound structural or regime change. It turns out that only seemingly minor alterations in the parameters of a model microeconomy account for which of these four qualitative macro behaviors will appear.

Structural theory and structural formations

Abstract This paper introduces a group of articles on structural theory in economics and outlines characteristic methods for structural analysis. A formal theory of ‘structural formations’ is presented and practical automata-theoretic methods for complexity measurement are demonstrated.

An Information System Approach to the Analysis of Job Design

In many structured job designs, job content can be identified with the complexity of human-machine interfaces, with the computational or logical complexity of decision routines, and with interactive complexities associating with organizational or command structures. We have argued elsewhere(2) that such complexities may be measured or evaluated using established results in the theory of automata(3–5) and methods developed by us(6,7) to yield a practically small set of complexity parameters and class indices descriptive of an entire job and/or routines and tasks within the job. In turn, it is hypothesized that complexity parameters and indices so derived can be used to predict behavioral responses to the job. Appropriate job content can affect attitudes toward work generally, improve performance specifically, and may assist in developing responsibility. In an industrial setting, these effects would be partial determinants of general productivity and individual satisfaction. They may also associate with performance reliability for an operation or system and with the developments of responsibility, efficiency, and sustainable interest for individuals and groups.

Theoretical reconciliation of equilibrium and structural approaches

Abstract This paper shows that the solution space of Hamiltonian models of economic production and growth is intrinsically catastrophic (unless constrained by excessively stringent restrictions on technology and information). The paper explores cusp and fold deformations which are tied to organizational and informational processes. In turn, these processes are shown to be well represented by structural models in which cellular-automata simulate the reorganization of sequential machines.

“Strategic Mind Set” and the Assessment of Information in Serious Games

More often than not economists have been concerned with games of imperfect as against perfect information and solution properties as against strategic properties and skill characteristics. The game in these connections tends to be the simplest abstract model of the process at interest rather than an actual game of intrinsic interest to mature individuals. There is no disputing the fact that the standard orientation has led and will continue to lead to important theoretical understandings. Nevertheless, there are a number of instances in which concern with the detailed properties of an established game may be productive of insights, and accordingly we will consider the potential theoretical content of games of “skill” such as chess, Go, bridge, and poker as behavioral and institutional models.