Randomness in the Dynamics of Economic and Social Processes. A Network Model of Personal Consumption

Steven Silver () and Philip Cowans ()
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Steven Silver: California State University, San Jose
Philip Cowans: University of Cambridge

European Journal of Economic and Social Systems, 2008, vol. 21, issue 1, 107-141

Abstract: The effects of randomness are more pervasive and enduring in economic and social processes than is commonly recognized. The results of a network model show two cases in which random disturbances have significant and enduring effects on dynamics in a consumption system. In the first one, we show that randomness can facilitate an order and efficiency objective through stochastic resonance. In the second case, we show that exogenous random disturbances to initial levels of constructs can modify the magnitude of equilibrium clustering in the network and thereby define enduring structure. We are early in the process of defining the effects of randomness on economic and social processing and their implications. Our priority should be in investigating diverse causal processes rather than deferring to natural selection or any other single candidate process for reasons of parsimony, analytical convenience, or because it has the most empirical support in other disciplines.

Keywords: Environments and Randomness; Personal Consumption; Stochastic Resonance; Small World Networks; Institutional Evolution (search for similar items in EconPapers)
JEL-codes: D71 D85 Z13 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ejessy:0077

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