Econophysical visualization of Adam Smith’s invisible hand
AbstractConsider a complex system whose macrostate is statistically observable, but yet whose operating mechanism is an unknown black-box. In this paper we address the problem of inferring, from the system’s macrostate statistics, the system’s intrinsic force yielding the observed statistics. The inference is established via two diametrically opposite approaches which result in the very same intrinsic force: a top-down approach based on the notion of entropy, and a bottom-up approach based on the notion of Langevin dynamics. The general results established are applied to the problem of visualizing the intrinsic socioeconomic force–Adam Smith’s invisible hand–shaping the distribution of wealth in human societies. Our analysis yields quantitative econophysical representations of figurative socioeconomic forces, quantitative definitions of “poor” and “rich”, and a quantitative characterization of the “poor-get-poorer” and the “rich-get-richer” phenomena.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.
Volume (Year): 392 (2013)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/
Complex systems; Intrinsic forces; Entropy; Langevin equation; Distribution of wealth; Poor-get-poorer; Rich-get-richer;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Irle, Albrecht & Milaković, Mishael & Alfarano, Simone & Kauschke, Jonas, 2008.
"A Statistical Equilibrium Model of Competitive Firms,"
Economics Working Papers
2008,10, Christian-Albrechts-University of Kiel, Department of Economics.
- Alfarano, Simone & Milaković, Mishael & Irle, Albrecht & Kauschke, Jonas, 2012. "A statistical equilibrium model of competitive firms," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 136-149.
- Alfarano, Simone & Milaković, Mishael, 2008.
"Does Classical Competition Explain the Statistical Features of Firm Growth?,"
Economics Working Papers
2008,03, Christian-Albrechts-University of Kiel, Department of Economics.
- Alfarano, Simone & Milakovic, Mishael, 2008. "Does classical competition explain the statistical features of firm growth?," Economics Letters, Elsevier, vol. 101(3), pages 272-274, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.