EiLab explores the role of entropy in simple economic models. EiLab is one of several models exploring the dynamics of sustainable economics – PSoup, ModEco, EiLab, OamLab, MppLab, TpLab, and CmLab.

The model is an experimental ground to study the impact of network structure on diffusion. It allows to construct a social network that already has some measurable level of homophily, and simulate a diffusion process over this social network.

The purpose of this model is to examine equity and efficiency in crop production across a system of irrigated farms, as a function of maintenance costs, assessed water fees, and the capacity of farmers to trade water rights among themselves.

The modeling includes citizens, bounded into families; firms and governments; all of them interacting in markets for goods, labor and real estate. The model is spatial and dynamic.

The SWE models firms search behaviour as the performance landscape shifts. The shift represents society’s pricing of negative externalities, and the performance landscape is an NK structure. The model is written in NetLogo.

It is very difficult to model a sustainable intergenerational biophysical/financial economy. ModEco NLG is one of a series of models exploring the dynamics of sustainable economics – PSoup, ModEco, EiLab, OamLab, MppLab, TpLab, CmLab.

CPNorm is a model of a community of harvesters using a common pool resource where adhering to the optimal extraction level has become a social norm. The model can be used to explore the robustness of norm-driven cooperation in the commons.

There is a new type of economic model called a capital exchange model, in which the biophysical economy is abstracted away, and the interaction of units of money is studied. Benatti, Drăgulescu and Yakovenko described at least eight capital exchange models – now referred to collectively as the BDY models – which are replicated as models A through H in EiLab. In recent writings, Yakovenko goes on to show that the entropy of these monetarily isolated systems rises to a maximal possible value as the model approaches steady state, and remains there, in analogy of the 2nd law of thermodynamics. EiLab demonstrates this behaviour. However, it must be noted that we are NOT talking about thermodynamic entropy. Heat is not being modeled – only simple exchanges of cash. But the same statistical formulae apply.

In three unpublished papers and a collection of diary notes and conference presentations (all available with this model), the concept of “entropic index” is defined for use in agent-based models (ABMs), with a particular interest in sustainable economics. Models I and J of EiLab are variations of the BDY model especially designed to study the Maximum Entropy Principle (MEP – model I) and the Maximum Entropy Production Principle (MEPP – model J) in ABMs. Both the MEPP and H.T. Odum’s Maximum Power Principle (MPP) have been proposed as organizing principles for complex adaptive systems. The MEPP and the MPP are two sides of the same coin, and an understanding of their implications is key, I believe, to understanding economic sustainability. Both of these proposed (and not widely accepted) principles describe the role of entropy in non-isolated systems in which complexity is generated and flourishes, such as ecosystems, and economies.

EiLab is one of several models exploring the dynamics of sustainable economics – PSoup, ModEco, EiLab, OamLab, MppLab, TpLab, and CmLab.

This study simulates the evolution of artificial economies in order to understand the tax relevance of administrative boundaries in the quality of life of its citizens. The modeling involves the construction of a computational algorithm, which includes citizens, bounded into families; firms and governments; all of them interacting in markets for goods, labor and real estate. The real estate market allows families to move to dwellings with higher quality or lower price when the families capitalize property values. The goods market allows consumers to search on a flexible number of firms choosing by price and proximity. The labor market entails a matching process between firms (given its location) and candidates, according to their qualification. The government may be configured into one, four or seven distinct sub-national governments, which are all economically conurbated. The role of government is to collect taxes on the value added of firms in its territory and invest the taxes into higher levels of quality of life for residents. The results suggest that the configuration of administrative boundaries is relevant to the levels of quality of life arising from the reversal of taxes. The model with seven regions is more dynamic, but more unequal and heterogeneous across regions. The simulation with only one region is more homogeneously poor. The study seeks to contribute to a theoretical and methodological framework as well as to describe, operationalize and test computer models of public finance analysis, with explicitly spatial and dynamic emphasis. Several alternatives of expansion of the model for future research are described. Moreover, this study adds to the existing literature in the realm of simple microeconomic computational models, specifying structural relationships between local governments and firms, consumers and dwellings mediated by distance.

NearshoreABM simulates whether a region captures the production linkages that nearshoring makes available, or fails to capture them because physical infrastructure and credit supply bind first.

The model runs over the 32 Mexican states at quarterly frequency. Multinational anchor firms decide whether to enter and where to locate, following Melitz selection on heterogeneous productivity under trade-policy uncertainty. Domestic supplier firms decide whether to formalise and whether to invest in quality, and may or may not obtain a contract with an anchor. A banking sector allocates a finite regional credit supply according to observed default risk, serving anchor firms before suppliers.

Electricity and water capacity enter production as non-linear congestion penalties with an engineering-based threshold, so the response of output to demand growth is discontinuous rather than proportional: below the threshold there is no penalty at all, between threshold and capacity the penalty grows quadratically, and above capacity it decays exponentially. Congestion is rivalrous within the quarter, which makes the order of production economically meaningful rather than incidental.

…