Cooperativity in a trading model with memory and production

TL;DR

This paper explores how cooperation emerges in a market model with feedback mechanisms, showing it is robust under certain conditions and affects stock levels, with implications for economic self-organization.

Contribution

It introduces a model incorporating both positive and negative feedbacks in trading, revealing conditions for robust cooperation and self-organized stock accumulation.

Findings

Cooperativity is robust with slow production rates.

Cooperative economies can self-organize to maintain stocks.

Cooperativity diminishes with high production rates or low trade activity.

Abstract

We consider in a market model the cooperative emergence of value due to a positive feedback between perception of needs and demand. Here we consider also a negative feedback from production of the traded products, and find that this cooperativity is robust, provided that the production rate is slow. Cooperativity is found to be critically linked to the ability to minimize the overall need, and thus disappears when the agents are poor, when the production rate is large or when there is little trade. We further observe that a cooperative economy may self-organize to compensate for an eventual slow production rate of certain products, so that these products are found in sizeable stocks. This differs qualitatively from an economy where cooperativity did not develop, in which case no product has a stock larger than what its bare production rate justifies. We also find that these results are robust in relation to the spatial restriction of the agents.