Cartels Are an Emergent Phenomenon, Say Complexity Theorists – Technology Review

Newtons_cradle_animation_new

… in a population of a million agents over time period of a billion iterations and more.

… It turns out that a crucial factor is the speed at which buyers and sellers react to the market. When buyers react quickest, sellers are forced to match the best possible value for money and prices tend to drop.

By contrast, when sellers react quickest, they are quick to copy others offering poor value for money. This reduces the number of sellers offering good value for money in a vicious cycle that drives prices as high as possible. 

This is the emergence of a cartel and it happens in these guys’ model without any collusion between sellers. Instead, it is an emergent property of the market place that happens when the sellers outperform buyers in the way they react to market conditions. 

Cool result from computational economics. I wonder if similar things occur throughout the dynamics of new product adoption.

About Michael Harries

Technologist - emerging technologies, machine intelligence, foundational tech - startups and more.
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