Abstract
This paper presents some artificial stylised facts emerging in a simulated contestable market where firms interact with each other in taking their stay or go decision. We use nearly zero-intelligence firms: no optimisation is considered, and all the firms sell at a fixed price an equal quantity of the good. The entry of new firms is triggered by the overall profitability of the market, measured with the spread between the average rate of profit and the interest rate. The exit decision is modelled via a mean field effect, to take into account in the decision process both the performance of the individual firm, and the information about the profitability of the market that can be abduced looking at the stay or go decision of the other firms. Financial requirements of production are considered, with a spread between creditor and debtor interest rates. The model is simulated with the ACE approach, using the Swarm libraries released by the Santa Fe Institute.
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Leombruni, R., Gatti, D.D., Gallegati, M. (2001). Industrial Dynamics with Quasi-Zero Intelligence Interacting Firms. In: Kirman, A., Zimmermann, JB. (eds) Economics with Heterogeneous Interacting Agents. Lecture Notes in Economics and Mathematical Systems, vol 503. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-56472-7_9
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DOI: https://doi.org/10.1007/978-3-642-56472-7_9
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