Limited Time Offer
Premium members can get their quote collection automatically imported into their Quotewise collections.
This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an e… - W. Brian Arthur
" "This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an equilibrium from multiple candidates, by the interaction of economic forces and random 'historical events'. It shows how dynamically, increasing returns can cause the economy gradually to lock itself in to an outcome not necessarily superior to alternatives, not easily altered, and not entirely predictable in advance.
English
Collect this quote
About W. Brian Arthur
William Brian Arthur (born 21 July 1946) is an economist, Emeritus Professor of Economics and Population Studies at Stanford University, external faculty member at the , and a Visiting Researcher at the Intelligent Systems Lab at PARC. He is an authority on economics in relation to complexity theory, technology and financial markets, and is credited with influencing and describing the modern theory of increasing returns, and the invention of the .
Also Known As
Alternative Names:
William Brian Arthur
Related quotes. More quotes will automatically load as you scroll down, or you can use the load more buttons.
Additional quotes by W. Brian Arthur
Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to a predictable equilibrium for prices and market shares. Such feedback tends to stabilize the economy because any major changes will be offset by the very reactions they generate. The high oil prices of the 1970s encouraged energy conservation and increased oil exploration, precipitating a predictable drop in prices by the early 1980s. According to conventional theory, the equilibrium marks the “best” outcome possible under the circumstances: the most efficient use and allocation of resources.
In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magnifies the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback – increasing returns – makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the “best” one.
Unlimited Quote Collections
Organize your favorite quotes without limits. Create themed collections for every occasion with Premium.
Right after we published our first findings, we started getting letters from all over the country saying, "You know, all you guys have done is rediscover Austrian economics"… I admit I wasn't familiar with Hayek and von Mises at the time. But now that I've read them, I can see that this is essentially true.
Loading...