THE DYNAMICS OF BILATERAL EXCHANGE AND DIVISION OF LABOR

Kjell Hausken and John F. Moxnes ()
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John F. Moxnes: Department for Protection, Norwegian Defence Research Establishment, P. O. Box 25, 2007 Kjeller, Norway

International Journal of Modern Physics C (IJMPC), 2005, vol. 16, issue 01, 117-137

Abstract: The article presents a dynamic model of exchange, production, and consumption. In a dynamic world, complicated predictions often have to be made. Thus, in this article, the classical exchange model is expanded with a dynamic model specifying the intermediate states toward a static equilibrium, which may or may not be reached. A price mechanism was necessary to develop in order to describe these changes over time. The model is illustrated with two examples of the emergence of division of labor. The robustness of the dynamic model is tested with sensitivity analysis.

Keywords: Production; consumption; bilateral exchange; price mechanism; division of labor; axiomatic foundations; dynamics; differential equations; instrumental learning; operant conditioning (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1142/S0129183105006978

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