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Quantifying Value with Effective Complexity

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  • Maxwell Murialdo
  • Arturo Cifuentes

Abstract

We present a new economic theory of value based on complexity theory. For simplicity, we call this theory ‘complexalism’ (a portmanteau of ‘complexity’ and ‘capitalism’). Complexalism is a framework that establishes valuations by quantifying the present and future complexities of objects and their surroundings. This framework reparameterises questions of economic value into more objectively addressable subcomponents. First, we motivate the importance of developing alternative frameworks for value. Next, we discuss a novel three-dimensional framework to analyse value and the use of effective complexity as a proxy metric of economic value. Finally, we propose explicit methods for quantifying complexity and simulating valuations. The resulting valuations may serve to benchmark prices and can be used in evaluating the market rules of engagement. JEL: B41, B59, C63, D63

Suggested Citation

  • Maxwell Murialdo & Arturo Cifuentes, 2022. "Quantifying Value with Effective Complexity," Journal of Interdisciplinary Economics, , vol. 34(1), pages 69-85, January.
    • Handle: RePEc:sae:jinter:v:34:y:2022:i:1:p:69-85
    DOI: 10.1177/0260107920913663
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    References listed on IDEAS

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    More about this item

    Keywords

    Theory of value; valuation; economic policy; complexity;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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