This paper shows that signal restoration methodology is appropriate for predicting the equilibrium state of certain economic systems. A formal justification for this is provided by proving the existence of finite improvement paths in object allocation problems under weak assumptions on...

Knowledge spillovers have recently been analysed by Barde (2009) and Ostbye (2010) in a spatial general equilibrium framework. Both studies lack explicit micro foundations for the spillovers ‚Äí spillovers just take place and depend on firm density. The models must therefore be seen as...

Maximum entropy predictions are made for the Kirman ant model as well as the Abrams-Strogatz model of language competition, also known as the voter model. In both cases the maximum entropy methodology provides good predictions of the limiting distribution of states, as was already the case for...

The recent increase in the breath of computational methodologies has been matched with a corresponding increase in the difficulty of comparing the relative explanatory power of models from different methodological lineages. In order to help address this problem a universal information criterion...

Following Becker (1962), an information-theoretical thought experiment is developed to investigate whether the equilibrium properties of an exchange economy depend on the rational behaviour of agents. Transactions are logged through a communication channel into an external observer's dataset,...

Two stage least squares are a popular method of estimation of spatial auto-regressive models, where the dependent variable in an area is a function of the value of the same variable in contiguous areas. Existing literature on this topic points out, however, that this creates problems of...

An information-theoretic thought experiment is developed to provide a methodology for predicting endowment distributions in the absence of information on agent preferences. The allocation problem is first presented as a stylised knapsack problem. Although this knapsack allocation is intractable,...

The maximum entropy methodology is applied to the Schelling model of urban segregation in order to obtain a reliable prediction of the stable configuration of the system without resorting to numerical simulations. We show that this approach also provides an implicit equation describing the...

This paper extends the Puga (1999) model by introducing urban frictions. It assumes that the agglomeration of manufacturing in a city imposes a cost on the inhabitants of the agglomerated region. Furthermore, an implicit function methodology is developed to provide a numerical stability function...

Maximum entropy predictions are made for the Kirman ant model as well as the Abrams-Strogatz model of language competition, also known as the voter model. In both cases the maximum entropy methodology provides good predictions of the limiting distribution of states, as was already the case for...