HAL CCSD
The Google thought experiment: rationality, information and equilibrium in an exchange economy
Barde, Sylvain
Observatoire français des conjonctures économiques (Sciences Po) (OFCE) ; Sciences Po (Sciences Po)
hal-01069373
https://sciencespo.hal.science/hal-01069373
https://sciencespo.hal.science/hal-01069373/document
https://sciencespo.hal.science/hal-01069373/file/wp2009-34.pdf
https://sciencespo.hal.science/hal-01069373
2009
SCIENCESPO: 2441/eu4vqp9ompqllr09hc01g3029
info:eu-repo/semantics/altIdentifier/hdl/2441/eu4vqp9ompqllr09hc01g3029
en
Information theoretical measure
maximum entropy principle
en- tropy concentration theorem
JEL: C - Mathematical and Quantitative Methods/C.C0 - General/C.C0.C02 - Mathematical Methods
JEL: C - Mathematical and Quantitative Methods/C.C6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling/C.C6.C62 - Existence and Stability Conditions of Equilibrium
JEL: D - Microeconomics/D.D5 - General Equilibrium and Disequilibrium/D.D5.D51 - Exchange and Production Economies
JEL: D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D81 - Criteria for Decision-Making under Risk and Uncertainty
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
info:eu-repo/semantics/preprint
Preprints, Working Papers, ...
Following Becker (1962), an information-theoretical thought experiment is developed to investigate whether the equilibrium properties of an exchange economy depend on the rational behaviour of agents. Transactions are logged through a communication channel into an external observer's dataset, represented by Google. At some point this data connection fails and Google no longer receives the updates encoding the transactions. It is shown that Google can nevertheless make sharp predictions concerning the state of the economy. In particular, a stable long run distribution of endowments is expected, as well as a set of price-like variables. By construction this prediction does not rest on the rationality of agents, because the information-theoretical setting forces Google to treat the missed updates as random variables.
2009-12
info:eu-repo/semantics/OpenAccess