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Free keywords:
evolutionary economic models; social networks; Pareto optimality
MPIPKS:
Structure formation and active systems
Abstract:
A model for the evolution of economic systems is defined on a one-dimensional lattice using Pareto optimality. Pareto optimality is shown to maximize the total payoff of all agents in comparison to the Nash optimality. The small-world networks are found to be closer to the real social systems than both regular and random lattices. Then, the model is generalized to small-world networks that display different dynamics from the one-dimensional case. (C) 2002 Elsevier Science B.V. All rights reserved.