The Google thought experiment: rationality, information and equilibrium in an exchange economy
Following Becker (1962), an information-theoretical thought experiment is developed to investigate whether the equilibrium properties of an exchange economy depend on the rational behaviour of agents. Transactions are logged through a communication channel into an external observer's dataset, represented by Google. At some point this data connection fails and Google no longer receives the updates encoding the transactions. It is shown that Google can nevertheless make sharp predictions concerning the state of the economy. In particular, a stable long run distribution of endowments is expected, as well as a set of price-like variables. By construction this prediction does not rest on the rationality of agents, because the information-theoretical setting forces Google to treat the missed updates as random variables.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Dec 2009|
|Contact details of provider:|| Postal: 69, quai d'Orsay - 75007 PARIS|
Phone: 01 44 18 54 00
Fax: 01 45 56 06 15
Web page: http://www.ofce.sciences-po.fr/
More information through EDIRC
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.:
- Michihiro Kandori & Roberto Serrano & Oscar Volij, 2004.
"Decentralized Trade, Random Utility and the Evolution of Social Welfare,"
2004-06, Brown University, Department of Economics.
- Kandori, Michihiro & Serrano, Roberto & Volij, Oscar, 2008. "Decentralized trade, random utility and the evolution of social welfare," Journal of Economic Theory, Elsevier, vol. 140(1), pages 328-338, May.
- Volij, Oscar & Serrano, Roberto & Kandori, Michihiro, 2005. "Decentralized trade, random utility and the evolution of social welfare," UC3M Working papers. Economics we056433, Universidad Carlos III de Madrid. Departamento de Economía.
- Michihiro Kandori & Roberto Serrano & Oscar Volij, 2004. "Decentralized Trade, Random Utility and the Evolution of Social Welfare," CIRJE F-Series CIRJE-F-286, CIRJE, Faculty of Economics, University of Tokyo.
- KANDORI, Michihiro & Roberto Serrano & Oscar Volij, "undated". "Decentralized Trade, Random Utility and the Evolution of Social Welfare," Economic theory and game theory 021, Oscar Volij.
- Michihiro Kandori & Roberto Serrano & Oscar Volij, 2004. "Decentralized Trade, Random Utility and the Evolution of Social Welfare," Economics Working Papers 0042, Institute for Advanced Study, School of Social Science.
- Smith, Eric & Foley, Duncan K., 2008. "Classical thermodynamics and economic general equilibrium theory," Journal of Economic Dynamics and Control, Elsevier, vol. 32(1), pages 7-65, January.
- Foley Duncan K., 1994. "A Statistical Equilibrium Theory of Markets," Journal of Economic Theory, Elsevier, vol. 62(2), pages 321-345, April.
- Eaves, James & Melvin, Michael & Mohapatra, Sandeep, 2008. "Excess demand and price formation during a Walrasian auction," Journal of Empirical Finance, Elsevier, vol. 15(3), pages 533-548, June.
- Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
- Larry E. Blume, 1996.
96-04-022, Santa Fe Institute.
When requesting a correction, please mention this item's handle: RePEc:fce:doctra:0934. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Francesco Saraceno)
If references are entirely missing, you can add them using this form.