Probabilistic Economic Theory

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Anatoly Kondratenko. Probabilistic Economic Theory

PREFACE

References

INTRODUCTION. Probabilistic Economic Theory

References

PART A. The Agent-Based Physical Modeling of Market Economic Systems

CHAPTER I. Fundamentals of the Method of Agent-Based Physical Modeling

PREVIEW. What is the Main Point of the Concept of Agent-Based Physical Modeling?

1. The Concept of Agent-Based Physical Modeling

2. The Main Paradigm of Physical Economics

3. The Axioms and Principles of Physical Economics

4. The Classical Economies

4.1. The Two-Agent Market Economies

4.2. The Main Market Rule “Sell all – Buy at all”

4.3. The Many-Agent Market Economies

4.4. The Classical Economies versus Neoclassical Economies

References

CHAPTER II. The Constructive Design of the Agent-Based Physical Economic Models

PREVIEW. What is the Physical Economic Model?

1. The Basic Concept of Physical Economic Design

2. The Economic Multi-Dimensional Price-Quantity Space

3. The Market-Based Trade Maximization Principle and the Economic Equations of Motion

References

PART B. Classical Economy

CHAPTER III. Classical Economies in the Price Space

PREVIEW. What are the Economic Lagrange Equations?

1. Foundations of Classical Economy

2. The Economic Lagrange Equations

3. Conclusions

References

CHAPTER IV. Functions of Supply and Demand

PREVIEW. What are Functions of Supply and Demand?

1. The Neoclassical Model of Supply and Demand

2. The Stationary Probability Model in the Price Space

3. The Additivity Formula for Supply and Demand in Many-Agent Markets

4. The Multiplicativity Formula for Supply and Demand in the Many-Good Markets

5. The Factorization Formulas for Supply And Demand in the Many-Good, Many-Agent Markets

6. Comments and Discussions

7. Conclusions

References

CHAPTER V. Market Price in the Price Space

PREVIEW. What is Market Price?

1. Introduction

2. Market Price in the Neoclassical Model

3. Probabilistic Market Pricing in One-Good Markets

4. Market Price and Total Supply and Demand

5. Monopoly of Supply

6. Monopsony of Demand

7. Relationship between the Equilibrium Price and the Market Price in the One-Good Markets

8. Market Price and Elasticities of Supply and Demand

9. Probabilistic Market Pricing in the Many-Good Markets

10. Comments and Conclusions

References

CHAPTER VI. Market Force in the Price Space

PREVIEW. What is Market Force?

1. Introduction

2. The One-Good Markets with One-Buyer and One-Seller

3. The One-Good Markets with Several Buyers and Sellers

4. Market Forces in the Many-Good Markets

5. Conclusions

References

PART D. Probability Economics. Stationary Probabilistic Economies in the Price-Quantity Space

CHAPTER VII. Supply and Demand, Price and Force

PREVIEW. What are Supply and Demand?

1. Introduction

2. The One-Good, One-Buyer and One-Seller Markets

2.1. Supply and Demand

2.2. The Factorization Formula for Supply and Demand

2.3. Market Price and Market Force

3. The One-Good, Many-Agent Markets

3.1. The Additivity Formula for Supply and Demand

3.2. The System of Equations for Market Prices and Market Quantities

4. The Many-Good, Many-Agent Markets

5. Conclusions

References

PART E. Probability Economics. Non-Stationary Probabilistic Economies in the Price-Quantity Space

CHAPTER VIII. The Market-Based Trade Maximization Principle: Market Processes, Supply and Demand Laws, and Equilibrium States

PREVIEW. What is Market Equilibrium State?

1. Introduction

2. The Non-Stationary Economies

3. The Market-Based Trade Maximization Principle and the Market Process

3.1. Mutual Market Agents’ Cooperation

3.2. Market Invisible Hand

4. The Market-Based Trade Maximization Principle and the Supply and Demand Laws

5. The Market-Based Trade Maximization Principle and the Market Equilibrium State

5.1. The One-Good, One-Buyer and One-Seller Markets

5.2. The Two-Good, One-Buyer, One-Seller Markets

5.3. The Many-Good, Many-Agent Markets

6. Conclusions

References

PART F. Quantum Economy

CHAPTER IX. Quantum Economies in the Price Space

PREVIEW. What are the Economic Schrödinger Equations?

1. Introduction

2. Foundations of Quantum Economy

2.1. The Time-Dependent Economic Schrödinger Equation

2.2. The Stationary Economic Schrödinger Equation

3. The One-Good, One-Buyer, One-Seller Markets

3.1. Agent Probability Distributions And The Deal Function

3.2. Supply and Demand Functions

3.3. Probabilistic Market Pricing Mechanism

3.4. Market Price and Elasticities of Supply And Demand

4. The Many-Agent Market Economies

5. Conclusions

References

CHAPTER X. Quantum Economies in the Price-Quantity Space

PREVIEW. What is Quantum Economy?

1. The Axioms of Physical Economics

2. The Principles of Physical Economics

3. The Time-Dependent Economic Schrödinger Equations in the Price-Quantity Space

4. The Stationary Economic Schrödinger Equations in the Price-Quantity Space

5. The Hypotheses of Quantum Economy

6. Numerical Calculations for the Model of Coupled Quantum Harmonic Oscillators

7. Excited States of Quantum Economies

8. Quantum Economic Cycles

9. Interrelation Quantum Economy with Other Economic Theories

10. Conclusions

References

AFTERWORD

1. Is Physics-Based Economics Feasible?

2. The Uncertainty and Probability Principle in Economic Theory

3. Character of Economic Laws

4. The Physical Method of Economics

References

Отрывок из книги

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The monograph offered to the attention of readers is the second in the series [1, 2, 3] devoted to the development of probabilistic economic theory. This book presents principles of physical economics, new economic discipline primarily concerned in the book with the agent-based physical modeling of the market economic systems and eventually with the elaborating of probabilistic economic theory. At the heart of physical economics and probabilistic economic theory are the well-known cornerstone concepts of classical economics, in particular the subjective theory of value, such as regularity in the sequence of market phenomena and an interdependence of those, as well as key roles of individuals’ actions and social cooperation in the many-agent market processes. The main point of the concept of the physical modeling is that formal approaches and procedures of theoretical physics are used to describe these economic concepts. The obvious structural and dynamic analogy of the many-agent economic systems with the many-particle physical systems is basic to the formulation of fundamentals of the method of the agent-based physical modeling of the many-agent market economic systems in the formal economic space.

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It is natural here to name D10(t1) the total demand of buyer at the initial moment of trading. The sense of this quantity is in the fact that this is quantity of resources, planned for the purchase of goods, expressed in the money, although the dimension of this demand is the dimension of money price ($/ton) multiplied by the dimension of quantity (ton). In our case, this is $. We emphasize that, over the course of development of quantitative theory, this is very important in order to draw attention to the dimension of the used quantities and parameters, and to the normalization of the applied functions (see below).

By analogy with classical mechanics, we can treat these prices and quantity functions as the trajectories of movement of the market agents in the two-dimensional economic PQ-space as it was displayed in Fig. 3.

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