Regulating economic systems in a multi-trait model of self-organized criticality

Di Lu and Shuming Du

Physica A: Statistical Mechanics and its Applications, 2007, vol. 373, issue C, 586-592

Abstract: We study the effect of size-based regulation on an economic system. A multiple-trait model of self-organized criticality is used to simulate the economic system. The major difference of this work from previous studies is that firm's fitness is not characterized by a single number but by M traits. Each trait represents one aspect of the competitiveness of the firm, and firm's size is one of these traits. Major finding drawn from the present study is that the effectiveness of regulations decreases with increasing M, i.e., size-based regulations are less effective when the overall fitness of a firm is determined by more factors.

Keywords: Self-organized criticality; Fitness; Regulation; Economic systems (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:373:y:2007:i:c:p:586-592

DOI: 10.1016/j.physa.2006.04.122

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