Peer-to-peer technology has made massive music piracy possible, which, in turn, has arguably had a significant economic impact on the recording industry. Record labels have responded to online piracy with litigation and are also considering self-help measures. It is currently not obvious whether...

The growth of unsolicited commercial email imposes increasing costs on organizations and causes considerable aggravation on the part of email recipients. A thriving anti-spam industry addresses some of the frustration. Regulation and various economic and technical means are in the works –...

We develop an explanation of the emergence of local norms, and the associated phenom- enon of geographical variation in behavior. Individuals are assumed to interact locally with neighbors in an environment with a network externality. Although many patterns of behavior are possible, the...

We apply agent based computer techniques to develop a modeling framework that can be used to study all aspects of commodity markets. The goal is to use advances in computation to study the micro level behavior of the market and its players. This work is motivated by the understanding that the...

Consider a simple world populated with two kinds of individuals, those who work and create wealth (peasants) and those who survive by taking the property of others (bandits). The presence of bandits creates an incentive for peasants to seek protection, to defend their property. But protection is...

Base rate neglect has been shown to be a very robust bias in human information processing. It has also been show to be ecologically rational in some environments. However, when arguing about base rate neglect usually isolated individuals are considered. I complement these results by showing that...

We study the extent to which self-referential adaptive learning can explain stylized asset pricing facts in a general equilibrium framework. In particular, we analyze the effects of recursive least squares and constant gain algorithms in a production economy and a Lucas type endowment economy....

In this paper we analyze a dynamic, asset pricing model where an arbitrary number of heterogeneous, procedurally rational investors divide their wealth between two assets. Both fundamental dividend process and behavior of traders are modeled in a very general way. In particular, agents' choices...

Centralized exchange has a worst-case size-complexity many orders of magnitude lower than decentralized monetary exchange for the same number of agents and goods. A more rapid approach to competitive equilibrium may therefore be possible through centralized exchange. An additional benefit of...

We consider a simple pure exchange economy with two assets, one riskless, yielding a constant return, and one risky, paying a stochastic dividend, and we assume trading to take place in discrete time inside an endogenous price formation setting. Traders demand for the risky asset is expressed as...