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| Takuma Tanaka |
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| ''Predicting agents' direction of change in a non-stochastic economy using a potential function'' |
| ( 2022, Vol. 42 No.2 ) |
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| This study examines an optimal agent producing a consumption good and depreciating capital and trading capital without depreciation. Assuming that the prices of the depreciating capital are fixed and that the future prices of undepreciated capital are announced, this study demonstrates that the agent never loses profit on trading undepreciated capital if the agent's state converges to the initial state. Corollary to this result, we found a scalar potential that predicts the change direction of agents trading the undepreciated capital exclusively among them. The similarity between the scalar potential and the Helmholtz free energy suggests that stochastic economic models could be characterized by a framework similar to information thermodynamics. |
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| Keywords: Non-stochastic model, intertemporal choice, capital, planning |
JEL: D9 - Intertemporal Choice and Growth: General
D1 - Household Behavior: General |
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| Manuscript Received : Nov 27 2021 | | Manuscript Accepted : Jun 30 2022 |
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