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Cooperation: Spontaneous Emergence of the Invisible Hand

  • Ji-Ping Huang
Chapter
Part of the New Economic Windows book series (NEW)

Abstract

There has been a belief that with the directing power of the market, the efficient state of a resource-allocation system can eventually be reached even in a case where the resource is distributed in a biased way. To mimic the realistic huge system for the resource allocation, we design and conduct a series of controlled experiments. From the experiments we find that efficient allocation can be spontaneously realized despite a lack of communications among the participants or any instructions to them. To explain the underlying mechanism, we construct an agent-based model by introducing heterogeneous preferences into the strategy-building procedures. The model produces results in good agreement with the experiments. We investigate the influence of agents’ decision-making capacity on the system behavior and the phase structure of the model as well. A number of phase transitions are identified in the system. In the critical region, we find that the overall system will spontaneously display an efficient, stable, and unpredictable mode in which the market’s invisible hand can fully play its role.

Keywords

Resource-allocation system The invisible hand Balanced state Phase transition 

Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Department of PhysicsFudan UniversityShanghaiChina

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