TITLE

# Crises and Collective Socio-Economic Phenomena: Simple Models and Challenges

AUTHOR(S)
Bouchaud, Jean-Philippe
PUB. DATE
May 2013
SOURCE
Journal of Statistical Physics;May2013, Vol. 151 Issue 3/4, p567
SOURCE TYPE
DOC. TYPE
Article
ABSTRACT
Financial and economic history is strewn with bubbles and crashes, booms and busts, crises and upheavals of all sorts. Understanding the origin of these events is arguably one of the most important problems in economic theory. In this paper, we review recent efforts to include heterogeneities and interactions in models of decision. We argue that the so-called Random Field Ising model ( rfim) provides a unifying framework to account for many collective socio-economic phenomena that lead to sudden ruptures and crises. We discuss different models that can capture potentially destabilizing self-referential feedback loops, induced either by herding, i.e. reference to peers, or trending, i.e. reference to the past, and that account for some of the phenomenology missing in the standard models. We discuss some empirically testable predictions of these models, for example robust signatures of rfim-like herding effects, or the logarithmic decay of spatial correlations of voting patterns. One of the most striking result, inspired by statistical physics methods, is that Adam Smith's invisible hand can fail badly at solving simple coordination problems. We also insist on the issue of time-scales, that can be extremely long in some cases, and prevent socially optimal equilibria from being reached. As a theoretical challenge, the study of so-called 'detailed-balance' violating decision rules is needed to decide whether conclusions based on current models (that all assume detailed-balance) are indeed robust and generic.
ACCESSION #
86449506

## Related Articles

• Scaling and self-averaging in the three-dimensional random-field Ising model. Fytas, N. G.; Malakis, A. // European Physical Journal B -- Condensed Matter;Jan2011, Vol. 79 Issue 1, p13

We investigate, by means of extensive Monte Carlo simulations, the magnetic critical behavior of the three-dimensional bimodal random-field Ising model at the strong disorder regime. We present results in favor of the two-exponent scaling scenario, $\bar{\eta}$ = 2 Î·, where Î· and...

• Disorder-driven first-order phase transformations: A model for hysteresis. Dahmen, Karin; Kartha, Sivan; Krumhansl, James A.; Roberts, Bruce W.; Sethna, James P.; Shore, Joel D. // Journal of Applied Physics;5/15/1994, Vol. 75 Issue 10, p5946

Examines hysteresis in the zero temperature random-field Ising model. Simulation results; Transition in the model; Description on the hysteresis loops at different disorders; Avalanche size distribution in the hysteresis loop.

• High-field magnetization measurements of the metastability boundary in a d=2 random-field Ising system. King, A. R.; Jaccarino, V.; Motokawa, M.; Sugiyama, K.; Date, M. // Journal of Applied Physics;4/15/1985, Vol. 57 Issue 8, p3297

Presents a study which examined magnetization measurements of the random-field Ising model system. Methodology; Results; Discussion.

• Hysteresis, metastability, and time dependence in d=2 and d=3 random-field Ising systems. Belanger, D. P.; Rezende, S. M.; King, A. R.; Jaccarino, V. // Journal of Applied Physics;4/15/1985, Vol. 57 Issue 8, p3294

Presents a study which examined the hysteretic properties of random-field Ising model systems using neutron scattering. Methodology; Results; Discussion.

• Thermal critical behavior and universality aspects of the three-dimensional random-field Ising model. Malakis, A.; Fytas, N. G. // European Physical Journal B -- Condensed Matter;May2006, Vol. 51 Issue 2, p257

The three-dimensional bimodal random-field Ising model is investigated using the N-fold version of the Wang-Landau algorithm. The essential energy subspaces are determined by the recently developed critical minimum energy subspace technique, and two implementations of this scheme are utilized....

• Analysis of a long-range random field quantum antiferromagnetic Ising model. Chakrabarti, B. K.; Das, Arnab; Inoue, Jun-ichi // European Physical Journal B -- Condensed Matter;Jun2006, Vol. 51 Issue 3, p321

We introduce a solvable quantum antiferromagnetic model. The model, with Ising spins in a transverse field, has infinite range antiferromagnetic interactions and random fields on each site following an arbitrary distribution. As is well-known, frustration in the random field Ising model gives...

• Random-field critical scattering. Jaccarino, V.; King, A. R.; Belanger, D. P. // Journal of Applied Physics;4/15/1985, Vol. 57 Issue 8, p3291

Presents a study which examined the quasielastic scattering of neutrons in random-field Ising model (RFIM) systems in the critical region. Methodology; Results of studies on RFIM systems; Discussion.

• Numerical results for the random field Ising model (invited). Pytte, E.; Fernandez, J. F. // Journal of Applied Physics;4/15/1985, Vol. 57 Issue 8, p3274

Presents a study which performed numerical calculations for the random field ferromagnetic Ising model in two dimensions. Methodology; Results; Discussion.

• Russian-Kazakhstani Relations: A Return of Moscow's Neo-Imperialist Rhetoric. Voloshin, Georgiy // Eurasia Daily Monitor;2/27/2014, Vol. 11 Issue 38, p7

The article discusses the impact of the post of former leader of Russia's National Bolshevik Party Eduard Limonov in social media which shows forthcoming power transition in Kazakhstan that occupy the northern provinces. It highlights the nationalist revolution in Ukraine wherein it struggle to...

Share