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Computability and Evolutionary Complexity: Markets As Complex Adaptive Systems (CAS)

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Sheri M. Markose ()

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Abstract

The purpose of this Feature is to critically examine and to contribute to the burgeoning multi disciplinary literature on markets as complex adaptive systems (CAS). Three economists, Robert Axtell, Steven Durlauf and Arthur Robson who have distinguished themselves as pioneers in different aspects of how the thesis of evolutionary complexity pertains to market environments have contributed to this special issue. Axtell is concerned about the procedural aspects of attaining market equilibria in a decentralized setting and argues that principles on the complexity of feasible computation should rule in or out widely held models such as the Walrasian one. Robson puts forward the hypothesis called the Red Queen principle, well known from evolutionary biology, as a possible explanation for the evolution of complexity itself. Durlauf examines some of the claims that have been made in the name of complex systems theory to see whether these present testable hypothesis for economic models. My overview aims to use the wider literature on complex systems to provide a conceptual framework within which to discuss the issues raised for Economics in the above contributions and elsewhere. In particular, some assessment will be made on the extent to which modern complex systems theory and its application to markets as CAS constitutes a paradigm shift from more mainstream economic analysis.

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Paper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 574.

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Date of creation: 08 Jan 2004
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Handle: RePEc:esx:essedp:574

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  12. Lux, Thomas & Sornette, Didier, 2002. "On Rational Bubbles and Fat Tails," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(3), pages 589-610, August.
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  13. repec:cup:macdyn:v:4:y:2000:i:3:p:373-414 is not listed on IDEAS
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Cited by:
(explanations, 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.)

  1. Sheri Markose & Amadeo Alentorn & Andreas Krause, 2004. "Dynamic Learning, Herding and Guru Effects in Networks," Economics Discussion Papers 582, University of Essex, Department of Economics. [Downloadable!]
  2. Fontana Magda & Ferraris Gianluigi, 2006. "Managing knowlwdge in agent-based models: theoretical and methodological issues," Department of Economics Working Papers 200603, University of Turin. [Downloadable!]
  3. Resende, Marcelo / Zeidan, Rodrigo M., 2007. "Lionel Robbins: A Methodological Reappraisal," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  4. U. Witt, 2007. "Novelty and the Bounds of Unknowledge in Economics," Papers on Econonmics and Evolution 2007-07, Max Planck Institute of Economics, Evolutionary Economics Group. [Downloadable!]
  5. Prof John Foster, 2004. "From Simplistic to Complex Systems in Economics," Discussion Papers Series 335, School of Economics, University of Queensland, Australia. [Downloadable!]
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