Chapter 8: Regulation
Regulatory feedback is where a system responds in an opposite direction to a perturbation. For example, if a café has many visitors the café employees make more coffee. If queues become too long customers stay away. The individual agents, the employees and the customers, behave in a way that eventually leads to an equilibrium queuing time. Regulatory feedback usually, though does not always, performs a balancing act that stabilises systems, bringing them to equilibrium. When it works effectively regulatory allows us to understand why supply and demand are so neatly regulated, not only in our own society but also in the workings of other animal societies.
Key ideas covered in this chapter: regulatory and negative feedback; regulatory equilibrium; honey bee comb construction; over-compensation and chaos; microeconomics and financial markets; fluctuations in share prices; El-Farol bar problem and minority problems; congestion; escape panic; traffic jams and lane formation; seggregation; Schelling's model of racial seggregation; self-sorting; the invisible hand.
Links
Brian Arthur 'shomepage
Audrey Dussutour's homepage
Deborah Gordon 's homepage
Dirk Helbing's homepage
Paul Krugman's unofficial homepage
Thomas Schelling's homepage
Tom Seeley's homepage
Stephen Pratt 's homepage
References
Arthur, W. B. 1999 Complexity and the economy. Science 284, 107-109.
Beekman, M., Gilchrist, A. L., Duncan, M. & Sumpter, D. J. T. 2007 What makes a honeybee scout? Behavioral Ecology and Sociobiology.
Krugman, P. & Wells, R. 2004 Microeconomics: Worth publishers.
LeBaron, B. 2006 Agent-based Computational Finance. In Handbook of Computational Economics (ed. L. Tesfatsion & K. Judd), pp. 1187-1232: North-Holland.
Mantegna, R. N. & Stanley, H. E. 1995 Scaling Behavior in the Dynamics of an Economic Index. Nature 376, 46-49.
Pratt, S. C. 2004 Collective control of the timing and type of comb construction by honey bees (Apis mellifera). Apidologie 35, 193-205.
Schelling, T. C. 1978 Micromotives and macrobehaviour. New York: W W Norton and Company.
Seeley, T. D. 1995 The wisdom of the hive. Cambridge, Massachusetts: Belknap Press of Harvard University Press.
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