Emergent organization in a model market

Abstract

We study the collective behavior of interacting agents in a simple model of market economics originally introduced by Nørrelykke and Bak. A general theoretical framework for interacting traders on an arbitrary network is presented, with the interaction consisting of buying (namely, consumption) and selling (namely, production) of commodities. Extremal dynamics is introduced by having the agent with least profit in the market readjust prices, causing the market to self--organize. We study this model market on regular lattices in two--dimension as well as on random complex networks; in the critical state fluctuations in an activity signal exhibit properties that are characteristic of avalanches observed in models of self-organized criticality, and these can be described by power--law distributions.

6 pages, 4 figures

References in corpus (5)

• Dynamical synapses causing self-organized criticality in neural networks
• Econophysics of adaptive power markets: When a market does not dampen fluctuations but amplifies them
• Number theoretic example of scale-free topology inducing self-organized criticality
• Power spectrum of mass and activity fluctuations in a sandpile
• Scaling behaviour in probabilistic neuronal cellular automata