Cooperativity in a trading model with memory and production

R Donangelo and K Sneppen

Physica A: Statistical Mechanics and its Applications, 2002, vol. 316, issue 1, 581-591

Abstract: We consider in a market model the cooperative emergence of value due to a positive feedback between perception of needs and demand. Here we consider also a negative feedback from production of the traded products, and find that this cooperativity is robust, provided that the production rate is slow. Cooperativity is found to be critically linked to the ability to minimize the overall need, and thus disappears when the agents are poor, when the production rate is large or when there is little trade. We further observe that a cooperative economy may self-organize to compensate for an eventual slow production rate of certain products, so that these products are found in sizeable stocks. This differs qualitatively from an economy where cooperativity did not develop, in which case no product has a stock larger than what its bare production rate justifies. We also find that these results are robust in relation to the spatial restriction of the agents.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:316:y:2002:i:1:p:581-591

DOI: 10.1016/S0378-4371(02)01016-6

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