Temporal criticality in socio-technical systems

José Moran, Frank P. Pijpers, Utz Weitzel, Debabrata Panja and Jean-Philippe Bouchaud

INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

Abstract: Socio-technical systems, where technological and human elements interact in a goal-oriented manner, provide important, functional support to our societies. We draw specific attention to the concept of timeliness that has been ubiquitously and integrally adopted as a quality standard in the modus operandi of socio-technical systems, but remains an underappreciated aspect. We point out that a variety of incentives, often reinforced by competitive pressures, prompt system operators to myopically optimize for cost- and time-efficiencies, running the risk of inadvertently pushing the systems towards the proverbial 'edge of a cliff'. Invoking a stylized model for operational delays, we argue that this cliff edge is a true critical point — identified as temporal criticality — implying that system efficiency and robustness to perturbation are in tension with each other. Specifically for firm-to-firm production networks, we suggest that the proximity to temporal criticality is a possible route for solving the fundamental "excess volatility puzzle" in economics. Further, in generality for optimizing socio-technical systems, we propose that system operators incorporate a measure of resilience in their welfare functions.

Pages: 10 pages
Date: 2023-08
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Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2023-13

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