IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2409.10402.html

A Statistical Equilibrium Approach to Adam Smith's Labor Theory of Value

Author

Listed:
  • Ellis Scharfenaker
  • Bruno Theodosio
  • Duncan K. Foley

Abstract

Adam Smith's inquiry into the emergence and stability of the self-organization of the division of labor in commodity production and exchange is considered using statistical equilibrium methods from statistical physics. We develop a statistical equilibrium model of the distribution of independent direct producers in a hub-and-spoke framework that predicts both the center of gravity of producers across lines of production as well as the endogenous fluctuations between lines of production that arise from Smith's concept of "perfect liberty". The ergodic distribution of producers implies a long-run balancing of "advantages to disadvantages" across lines of employment and gravitation of market prices around Smith's natural prices.

Suggested Citation

  • Ellis Scharfenaker & Bruno Theodosio & Duncan K. Foley, 2024. "A Statistical Equilibrium Approach to Adam Smith's Labor Theory of Value," Papers 2409.10402, arXiv.org.
    • Handle: RePEc:arx:papers:2409.10402
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2409.10402
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Scharfenaker, Ellis, 2020. "Implications of quantal response statistical equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 119(C).
    2. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:uta:papers:2024-04 is not listed on IDEAS
    2. repec:bla:reviec:v:17:y:2009:i:si:p:327-337 is not listed on IDEAS
    3. H Peyton Young, 2014. "The Evolution of Social Norms," Economics Series Working Papers 726, University of Oxford, Department of Economics.
    4. Tom Johnston & Michael Savery & Alex Scott & Bassel Tarbush, 2023. "Game Connectivity and Adaptive Dynamics," Papers 2309.10609, arXiv.org, revised Jun 2025.
    5. Chantal Marlats, 2021. "Reputation effects in stochastic games with two long-lived players," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 1-31, February.
    6. Maarten C.W. Janssen, 1997. "Focal Points," Tinbergen Institute Discussion Papers 97-091/1, Tinbergen Institute.
    7. Michael Kosfeld, 2002. "Stochastic strategy adjustment in coordination games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(2), pages 321-339.
    8. Milchtaich, Igal & Winter, Eyal, 2002. "Stability and Segregation in Group Formation," Games and Economic Behavior, Elsevier, vol. 38(2), pages 318-346, February.
    9. Gale, John & Binmore, Kenneth G. & Samuelson, Larry, 1995. "Learning to be imperfect: The ultimatum game," Games and Economic Behavior, Elsevier, vol. 8(1), pages 56-90.
    10. Sanjeev Goyal & Fernando Vega-Redondo, 2000. "Learning, Network Formation and Coordination," Econometric Society World Congress 2000 Contributed Papers 0113, Econometric Society.
    11. Ianni, A., 2002. "Reinforcement learning and the power law of practice: some analytical results," Discussion Paper Series In Economics And Econometrics 203, Economics Division, School of Social Sciences, University of Southampton.
    12. Conley, John P. & Neilson, William S., 2013. "Endogenous coordination and discoordination games: Multiculturalism and assimilation," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 176-191.
    13. Bernard, Mark & Hett, Florian & Mechtel, Mario, 2016. "Social identity and social free-riding," European Economic Review, Elsevier, vol. 90(C), pages 4-17.
    14. Markus Kinateder & Luca Paolo Merlino, 2021. "The Evolution of Networks and Local Public Good Provision: A Potential Approach," Games, MDPI, vol. 12(3), pages 1-12, July.
    15. William Tracy, 2014. "Paradox Lost: The Evolution of Strategies in Selten’s Chain Store Game," Computational Economics, Springer;Society for Computational Economics, vol. 43(1), pages 83-103, January.
    16. Jun Honda, 2015. "Games with the Total Bandwagon Property," Department of Economics Working Papers wuwp197, Vienna University of Economics and Business, Department of Economics.
    17. Arnout van de Rijt, 2017. "Microfoundations of institutional change," Rationality and Society, , vol. 29(1), pages 63-68, February.
    18. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
    19. T. Guse & B. Hehenkamp, 2006. "The strategic advantage of interdependent preferences in rent-seeking contests," Public Choice, Springer, vol. 129(3), pages 323-352, December.
    20. , & , & ,, 2008. "Monotone methods for equilibrium selection under perfect foresight dynamics," Theoretical Economics, Econometric Society, vol. 3(2), June.
    21. Basov, S., 2001. "An Evolutionary Model of Reciprocity," Department of Economics - Working Papers Series 812, The University of Melbourne.
    22. Ball, Richard, 2017. "Violations of monotonicity in evolutionary models with sample-based beliefs," Economics Letters, Elsevier, vol. 152(C), pages 100-104.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2409.10402. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.