Complexity of markets

Computation in economic mechanisms



What is the computational power of a market? What is the computational complexity of the work that markets do? Socialist calculation debate. Computational complexity and command-and-control-economics.

Classic: Cosma Shalizi: In Soviet Union, Optimization Problem Solves You.

References

Arora, Sanjeev, Boaz Barak, Markus Brunnermeier, and Rong Ge. 2011. “Computational Complexity and Information Asymmetry in Financial Products.” Communications of the ACM 54 (5): 101–7. https://doi.org/10.1145/1941487.1941511.
Bossaerts, Peter, Elizabeth Bowman, Felix Fattinger, Harvey Huang, Carsten Murawski, Anirudh Suthakar, Shireen Tang, and Nitin Yadav. 2020. “Computational Complexity and Asset Pricing.” SSRN Scholarly Paper ID 3475433. Rochester, NY: Social Science Research Network. https://doi.org/10.2139/ssrn.3475433.
Bowles, Samuel. 2004. Microeconomics: Behavior, Institutions, and Evolution. Princeton University Press.
Bowles, Samuel, Alan Kirman, and Rajiv Sethi. 2017. “Retrospectives: Friedrich Hayek and the Market Algorithm.” Journal of Economic Perspectives 31 (3): 215–30. https://doi.org/10.1257/jep.31.3.215.
Daskalakis, C., P. Goldberg, and C. Papadimitriou. 2009. “The Complexity of Computing a Nash Equilibrium.” SIAM Journal on Computing 39 (January): 195–259. https://doi.org/10.1137/070699652.
Eremeev, A. V. 2017. “On Computational Complexity of the Electric Power Flow Optimization Problem in Market Environment.” Journal of Applied and Industrial Mathematics 11 (4): 500–505. https://doi.org/10.1134/S1990478917040068.
Gao, Yuan, and Christian Kroer. 2020. “First-Order Methods for Large-Scale Market Equilibrium Computation.” arXiv:2006.06747 [cs, Math], June. http://arxiv.org/abs/2006.06747.
Hayek, Friedrich A. 1945. “The Use of Knowledge in Society.” The American Economic Review 35 (4): 519–30. https://doi.org/10.1142/9789812701275_0025.
Levine, Matt. 2016. “Are Index Funds Communist?” Bloomberg.com, August 24, 2016. https://www.bloomberg.com/opinion/articles/2016-08-24/are-index-funds-communist.
Maymin, Philip Z. 2011. “Markets Are Efficient If and Only If P = NP.” Algorithmic Finance 1 (1): 1–11. https://doi.org/10.3233/AF-2011-007.
McLennan, Andrew. n.d. “The Computational Complexity of Games and Markets: An Introduction for Economists,” 86.
Mcleod, Doug, Garry Emmerson, Robert Kohn, and Geoff Kingston (universit. 2008. “Finding the Invisible Hand: An Objective Model of Financial Markets.”
Mises, Ludwig von. 2016. Economic Calculation In the Socialist Commonwealth. Lulu Press, Inc. https://mises.org/library/economic-calculation-socialist-commonwealth.
Nisan, Noam. 2007. Algorithmic Game Theory. Cambridge ; New York: Cambridge University Press. http://www.loc.gov/catdir/toc/ecip0715/2007014231.html.
———. n.d. “Algorithmic Mechanism Design,” 44.
Shafer, Glenn, and Vladimir Vovk. 2001. “Introduction: Probability and Finance as a Game.” In Probability and Finance: It’s Only a Game! Wiley-Interscience.
Spufford, Francis. 2012. Red Plenty. http://pombo.free.fr/spufford2010.pdf.

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