Typical properties of large random economies with linear activities

De Martino, A.; Marsili, M.; Castillo, I. Pérez

Typical properties of large random economies with linear activities

Authors

De Martino, A.

Marsili, M.

Castillo, I. Pérez

Description

We study the competitive equilibrium of large random economies with linear activities using methods of statistical mechanics. We focus on economies with $C$ commodities, $N$ firms, each running a randomly drawn linear technology, and one consumer. We derive, in the limit $N,C\to\infty$ with $n=N/C$ fixed, a complete description of the statistical properties of typical equilibria. We find two regimes, which in the limit of efficient technologies are separated by a phase transition, and argue that endogenous technological change drives the economy close to the critical point.
19 pages, 5 figures