Maximum Entropy, the Collective Welfare Principle and the Globalization Process

TL;DR

This paper draws an analogy between quantum mechanics and game theory to explain the globalization process as a tendency toward a maximum entropy state, emphasizing collective welfare and system stability.

Contribution

It introduces a novel analogy linking quantum mechanics and game theory, proposing that globalization resembles a system evolving toward maximum entropy and collective welfare.

Findings

Globalization behaves like a system tending to maximum entropy.

Systems in Nash Equilibrium or ESS are equivalent to maximum entropy states.

Predicts emergence of a single global currency and market.

Abstract

Although both systems analyzed are described through two theories apparently different (quantum mechanics and game theory) it is shown that both are analogous and thus exactly equivalents. The quantum analogue of the replicator dynamics is the von Neumann equation. Quantum mechanics could be used to explain more correctly biological and economical processes. It could even encloses theories like games and evolutionary dynamics. We can take some concepts and definitions from quantum mechanics and physics for the best understanding of the behavior of economics and biology. Also, we could maybe understand nature like a game in where its players compete for a common welfare and the equilibrium of the system that they are members. All the members of our system will play a game in which its maximum payoff is the equilibrium of the system. They act as a whole besides individuals like they obey a rule in where they prefer to work for the welfare of the collective besides the individual welfare. A system where its members are in Nash Equilibrium (or ESS) is exactly equivalent to a system in a maximum entropy state. A system is stable only if it maximizes the welfare of the collective above the welfare of the individual. If it is maximized the welfare of the individual above the welfare of the collective the system gets unstable an eventually collapses. The results of this work shows that the "globalization" process has a behavior exactly equivalent to a system that is tending to a maximum entropy state and predicts the apparition of big common markets and strong common currencies that will find its "equilibrium" by decreasing its number until they get a state characterized by only one common currency and only one common market around the world.