This paper develops an agent-based model to examine the emergent dynamic properties of share market price formation over time, with a view on financial market stability under alternative accounting regimes. In the model, individual heterogeneous investors interact with each other and with institutional devices which are an accounting system (related to the business firm) and a price system (related to the Share Exchange). These interactions provide mechanisms for transmission through which firm-specific (accounting signal) and market-driven (aggregate price) drivers can act. A baseline simulation analysis assesses the financial market stability under three alternative accounting designs, namely two kinds of historical cost accounting regime and one kind of fair value (mark-to-market) accounting regime. The former prove to better stabilize the financial system for market volatility and exuberance in perfectly balanced conditions between speculative and fundamentalist beliefs and intentions. An evolutionary analysis is then developed by varying the relative degree of speculative attitudes. Historical cost accounting regimes further prove to make the financial system more resilient to speculative waves occurring at inter-individual level. Baseline findings are further corroborated through experimental analysis in ten artificial financial systems. This mathematical institutional economic analysis has general implications for both designing accounting systems aimed at enhancing financial market stability and preventing pro-cyclicality, and the study of accounting information process in the formation of share market prices over time.

The increasing interdependencies between the world’s technological, socio-economic, and environmental systems have the potential to create global catastrophic risks. We may have to re-design many global networks, otherwise they could turn into "global time bombs".

In this paper we argue that if we want to find a more satisfactory approach to tackling the major socio-economic problems we are facing, we need to thoroughly rethink the basic assumptions of macroeconomics and financial theory. Making minor modifications to the standard models to remove "imperfections" is not enough, the whole framework needs to be revisited.

Economists are fond of the physicists’ powerful tools. As a popular mindset Toolism is as old as economics but the transplants failed to produce the same successes as in their aboriginal environment. Economists therefore looked more and more to the math department for inspiration. Now the tide turns again. The ongoing crisis discredits standard economics and offers the chance for a comeback. Modern econophysics commands the most powerful tools and argues that there are many occasions for their application. The present paper argues that it is not a change of tools that is most urgently needed but a paradigm change.

Motivated by empirical data, we develop a statistical description of the queue dynamics for large tick assets based on a two-dimensional Fokker-Planck (diffusion) equation, that explicitly includes state dependence, i.e. the fact that the drift and diffusion depends on the volume present on both sides of the spread. "Jump" events, corresponding to sudden changes of the best limit price, must also be included as birth-death terms in the Fokker-Planck equation. All quantities involved in the equation can be calibrated using high-frequency data on best quotes. One of our central finding is the the dynamical process is approximately scale invariant, i.e., the only relevant variable is the ratio of the current volume in the queue to its average value. While the latter shows intraday seasonalities and strong variability across stocks and time periods, the dynamics of the rescaled volumes is universal. In terms of rescaled volumes, we found that the drift has a complex two-dimensional structure, which is a sum of a gradient contribution and a rotational contribution, both stable across stocks and time. This drift term is entirely responsible for the dynamical correlations between the ask queue and the bid queue.

This paper investigates the relevance of the No-Ponzi game condition for public debt (i.e. the public debt growth rate has to be lower than the real interest rate, a necessary assumption for Ricardian equivalence) and of the transversality condition for the GDP growth rate (i.e. the GDP growth rate has to be lower than the real interest rate). First, on the unbalanced panel of 21 countries from 1961 to 2010 available in OECD database, those two conditions were simultaneously validated only for 29% of the cases under examination. Second, those two conditions were more frequent in the 1980s and the 1990s when monetary policies were more restrictive. Third, in tune with the Keynesian view, when the real interest rate is higher than the GDP growth, it corresponds to 75% of the cases of the increases of the debt/GDP ratio but to only 43% of the cases of the decreases of the debt/GDP ratio (fiscal consolidations).

One of the fundamental principles driving diversity or homogeneity in domains such as cultural differentiation, political affiliation, and product adoption is the tension between two forces: influence (the tendency of people to become similar to others they interact with) and selection (the tendency to be affected most by the behavior of others who are already similar). Influence tends to promote homogeneity within a society, while selection frequently causes fragmentation. When both forces are in effect simultaneously, it becomes an interesting question to analyze which societal outcomes should be expected. <br />In order to study the joint effects of these forces more formally, we analyze a natural model built upon active lines of work in political opinion formation, cultural diversity, and language evolution. Our model posits an arbitrary graph structure describing which "types" of people can influence one another: this captures effects based on the fact that people are only influenced by sufficiently similar interaction partners. In a generalization of the model, we introduce another graph structure describing which types of people even so much as come in contact with each other. These restrictions on interaction patterns can significantly alter the dynamics of the process at the population level. <br />For the basic version of the model, in which all individuals come in contact with all others, we achieve an essentially complete characterization of (stable) equilibrium outcomes and prove convergence from all starting states. For the other extreme case, in which individuals only come in contact with others who have the potential to influence them, the underlying process is significantly more complicated; nevertheless we present an analysis for certain graph structures.

The advancement of various fields of science depends on the actions of individual scientists via the peer review process. The referees' work patterns and stochastic nature of decision making both relate to the particular features of refereeing and to the universal aspects of human behavior. Here, we show that the time a referee takes to write a report on a scientific manuscript depends on the final verdict. The data is compared to a model, where the review takes place in an ongoing competition of completing an important composite task with a large number of concurrent ones - a Deadline -effect. In peer review human decision making and task completion combine both long-range predictability and stochastic variation due to a large degree of ever-changing external "friction".

We study the time evolution of ranking and spectral properties of the Google matrix of English Wikipedia hyperlink network during years 2003 - 2011. The statistical properties of ranking of Wikipedia articles via PageRank and CheiRank probabilities, as well as the matrix spectrum, are shown to be stabilized for 2007 - 2011. A special emphasis is done on ranking of Wikipedia personalities and universities. We show that PageRank selection is dominated by politicians while 2DRank, which combines PageRank and CheiRank, gives more accent on personalities of arts. The Wikipedia PageRank of universities recovers 80 percents of top universities of Shanghai ranking during the considered time period.

The following fundamental properties are proved to be true if a financial market is exhaustive: (i) Every event which is measurable by the price history at time T is independent of G_t conditional on the current price history H_t, where G_t is a superset of H_t, (ii) every event which is measurable by G_t is independent of H_T conditional on H_t. These properties are especially useful for asset valuation, portfolio optimization and risk management. An exhaustive market with respect to {F_t} is free of dominance and there are no free lunches with vanishing risk under {F_t}. Moreover, it is complete with respect to every information flow which is contained in {F_t} and the growth-optimal portfolio at time t is only determined by the past asset prices. This means any other information which is contained in F_t and available to the investor at time t is irrelevant.