We propose a discrete-time exchange economy evolutionary model with two groups of agents. In our setting the definition of equilibrium depends also on agents’ population shares, which affect the market clearing conditions. We prove that, despite such difference with the classical Walrasian framework, for all economies and population shares there exists at least one equilibrium, and we show that for all population shares, generically in the set of the economies, equilibria are finite and regular. We then introduce the dynamic law governing the evolution of the population shares, and we investigate the existence and the stability of the resulting stationary equilibria. We assume that the reproduction level of a group is related to its attractiveness degree, which depends on the social visibility level, determined by the consumption choices of the agents in that group. The attractiveness of a group is described via a generic bell-shaped map, increasing for low visibility levels, but decreasing when the visibility of the group exceeds a given threshold value, due to a congestion effect. The model is able to reproduce the recurrent dynamic behavior typical of the fashion cycle, presenting booms and busts in the agents’ consumption choices, and in the groups’ attractiveness and population shares.

Naimzada, A., Pireddu, M. (2020). A general equilibrium evolutionary model with two groups of agents, generating fashion cycle dynamics. DECISIONS IN ECONOMICS AND FINANCE, 43(1), 155-185 [10.1007/s10203-020-00280-0].

A general equilibrium evolutionary model with two groups of agents, generating fashion cycle dynamics

Naimzada, A;Pireddu, M
2020

Abstract

We propose a discrete-time exchange economy evolutionary model with two groups of agents. In our setting the definition of equilibrium depends also on agents’ population shares, which affect the market clearing conditions. We prove that, despite such difference with the classical Walrasian framework, for all economies and population shares there exists at least one equilibrium, and we show that for all population shares, generically in the set of the economies, equilibria are finite and regular. We then introduce the dynamic law governing the evolution of the population shares, and we investigate the existence and the stability of the resulting stationary equilibria. We assume that the reproduction level of a group is related to its attractiveness degree, which depends on the social visibility level, determined by the consumption choices of the agents in that group. The attractiveness of a group is described via a generic bell-shaped map, increasing for low visibility levels, but decreasing when the visibility of the group exceeds a given threshold value, due to a congestion effect. The model is able to reproduce the recurrent dynamic behavior typical of the fashion cycle, presenting booms and busts in the agents’ consumption choices, and in the groups’ attractiveness and population shares.
Articolo in rivista - Articolo scientifico
Bifurcation; Evolutionary mechanism; Fashion cycle; General equilibrium; Multistability; Social interaction;
General equilibrium, evolutionary mechanism, social interaction, fashion cycle, bifurcation, multistability
English
2020
43
1
155
185
partially_open
Naimzada, A., Pireddu, M. (2020). A general equilibrium evolutionary model with two groups of agents, generating fashion cycle dynamics. DECISIONS IN ECONOMICS AND FINANCE, 43(1), 155-185 [10.1007/s10203-020-00280-0].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/267030
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