parsons action scheme Class 07 | Advanced Microeconomics | Duncan Foley

Duncan Foley | Leo Model Professor of Economics at the New School for Social Research (NSSR) | Advanced Microeconomics: Information and Behavior in Political Economy | Class 07 Entropy-constrained Behavior in the Social Interaction Model | Spring 2016


Class 07 Entropy-constrained Behavior in the Social Interaction Model. During the first half of the lecture, the case of quantal response is described by the use of the social interaction model. The second half of the lecture consists of an introduction to the classical political economy.

The lecture begins with a presentation of a way to reach equilibria in the social interaction model with the entropy-constrained behavior. The best response does not necessary make everyone act in the same way, but people’s behavior depends on their behavior temperature, which determinates the probability of them choosing the best response. The model is enriched with graphical illustrations along with examples that clarify the functions of this model. In the second part, the social interaction model is applied in the classical political economy, emphasizing mainly on Adam Smith’s theory. The main question of this part is if the social coordination outcome is technically feasible in the hub-and-spoke model, in which all producers specialize and share their output equally, or in other words, to what extent the spontaneous socialism is feasible.

parsons action scheme Class 07 | Advanced Microeconomics | Duncan Foley
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