EFFECTIVE FREE ENERGY FOR INDIVIDUAL DYNAMICS

Sebastian Grauwin, Dominic Hunt, Eric Bertin and Pablo Jensen ()
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Sebastian Grauwin: Université de Lyon, Laboratoire de Physique, ENS Lyon and CNRS, 46 allée d'Italie, F-69007 Lyon, France;
Dominic Hunt: Université de Lyon, Laboratoire de Physique, ENS Lyon and CNRS, 46 allée d'Italie, F-69007 Lyon, France;
Eric Bertin: Université de Lyon, Laboratoire de Physique, ENS Lyon and CNRS, 46 allée d'Italie, F-69007 Lyon, France;
Pablo Jensen: Université de Lyon, Laboratoire de Physique, ENS Lyon and CNRS, 46 allée d'Italie, F-69007 Lyon, France;

Advances in Complex Systems (ACS), 2011, vol. 14, issue 04, 529-536

Abstract: Physics and economics are two disciplines that share the common challenge of linking microscopic and macroscopic behaviors. However, while physics is based on collective dynamics, economics is based on individual choices. This conceptual difference is one of the main obstacles one has to overcome in order to characterize analytically economic models. In this paper, we build both on statistical mechanics and the game theory notion of Potential Function to introduce a rigorous generalization of the physicist's free energy, which includes individual dynamics. Our approach paves the way to analytical treatments of a wide range of socio-economic models and might bring new insights into them. As first examples, we derive solutions for a congestion model and a residential segregation model.

Keywords: Statistical physics; dynamics; potential function; stochastic models; free energy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:wsi:acsxxx:v:14:y:2011:i:04:n:s0219525911003128

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DOI: 10.1142/S0219525911003128

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