SELF-ORGANIZED PERCOLATION AND CRITICAL SALES FLUCTUATIONS

Gérard Weisbuch () and Sorin Solomon
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Gérard Weisbuch: Laboratoire de Physique Statistique, Laboratoire associé au CNRS (UMR 8550), à l'ENS et aux Universités Paris 6/7, de l'Ecole Normale Supérieure, 24 rue Lhomond, F 75231 Paris Cedex 5, France
Sorin Solomon: Theoretical Physics Department, Racah Institute of Physics, Hebrew University of Jerusalem, Israel

International Journal of Modern Physics C (IJMPC), 2000, vol. 11, issue 06, 1263-1272

Abstract: There is a discrepancy between the standard view of equilibrium through price adjustment in economics and the observation of large fluctuations in stock markets. We study here a simple model where agents decisions not only depend upon their individual preferences but also upon information obtained from their neighbors in a social network. The model shows that information diffusion coupled to the adjustment process drives the system to criticality with large fluctuations rather than converging smoothly to equilibrium.

Keywords: Percolation; Fluctuations; Criticality; Power Spectrum; Sales Dynamics (search for similar items in EconPapers)
Date: 2000
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DOI: 10.1142/S0129183100001097

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