Can Entropy Serve as a Proxy for Competition Levels in Economic Systems?

[julesh]

Is there any particular reason why entropy could not be a measure of or proxy for the level of competition within a system?

 

[kuruman]

I am not sure what you mean. Can you provide an illustrative example showing how entropy might be used "as a measure of or proxy for" the level of competition in the system?

 

[julesh]

Take a system of competitive or cooperative agents (human, biological, molecular or atomic). Let's say they are competing for energy (or money, being that money is a proxy for energy). The state of maximum competition is the same as the state of maximum entropy. Can entropy therefore be treated as being a measure of or proxy for the level of competition in a system?

 

[kuruman]

When you say,

The state of maximum competition is the same as the state of maximum entropy.

you are begging the question.

 

[julesh]

Begging the question or not, maximum competition and maximum entropy both result in the same situation of complete dispersal of energy (or money) throughout all agents in the systems.

 

[Vanadium 50]

I don't think your economics are correct. As for your physics, do you know the definition of entropy?

 

[fresh_42]

Summary:: Is there any particular reason why entropy could not be a measure of or proxy for the level of competition within a system?

Is there any particular reason why entropy could not be a measure of or proxy for the level of competition within a system?

This doesn't make a lot of sense to compare: competition has rules, entropy does not.

 

[DaveC426913]

Begging the question or not, maximum competition and maximum entropy both result in the same situation of complete dispersal of energy (or money) throughout all agents in the systems.

Not sure I follow. How does maximum competition lead to maximum dispersal?

If both Eddie Oilers and Toronto Leafs were at max competition, the Stanley cup would not be maximally distributed between them.

 

[kuruman]

A bird has wings and flies.
An airplane has wings and flies.
Therefore a bird is an airplane.

 

[julesh]

Simple economics. In a perfect market place there is maximum competition. No agents are cooperating. In such a situation, then the outcome is that through competition between the agents money becomes evenly dispersed throughout the system. Why is that not the equivalent of a state of maximum entropy? Boltzmann's maths would predict the same result in both cases.

 

[Vanadium 50]

Boltzmann's maths would predict the same result in both cases.

Can you show this?

I am beginning to doubt that you are asking a question and concluding you are pushing your own personal theory.

 

[DaveC426913]

...through competition between the agents money becomes evenly dispersed throughout the system. ..

How does that jive with post 8?

If one agent has excellent skills compared to the others, the resources will not end up evenly dispersed.

 

[Bystander]

https://www.google.com/search?q=the...ome..69i57.42990j0j7&sourceid=chrome&ie=UTF-8

 

[julesh]

No reason for competition to have rules. Don't think of sport. Think of multiple agents (as in economic agents or organisms) in a system all competing - independently and simultaneously.

 

[julesh]

How does that jive with post 8?

If one agent has excellent skills compared to the others, the resources will not end up evenly dispersed.

Indeed. But in perfect competition, assume all agents are the same.

 

[hilbert2]

How can the particles in a point-particle ideal gas "compete" when they don't even interact in any way? Still they tend to distribute to constant density in a container, as the 2nd law of thermodynamics requires.

 

[A.T.]

...concluding you are pushing your own personal theory.

That pretty much applies to all of economics.

 

[DaveC426913]

Indeed. But in perfect competition, assume all agents are the same.

If we have to add such an unrealistic and unilateral condition, then what value does the thesis provide?

It's kind of like saying "If there are ten students in the playground and ten balls, and students all run the same speed, so they each can grab only a single ball, then we have demonstrated ideal dispersion."

It's s truism - you're forcing it to be true.

And then having forced it, you're comparing it to something only superficially similar. See kuruman's post 9 example of birds and planes both having wings.

I'm not saying it's wrong; I'm simply not seeing what insight you see being gained.

 

[Nugatory]

Is there any particular reason why entropy could not be a measure of or proxy for the level of competition within a system?

Entropy has a precise mathematical definition: it is $K\ln\Omega$. There is no comparable definition for “level of competition”, and without that clarity about the terms being used it is difficult to have a useful discussion.

This thread is closed. As with all thread closures, anyone can PM me or any of the other mentors to ask that it be reopened if there is something more to say.

 

[jedishrfu]

While I can't say if there is a relationship between competition and the entropy of an economic system, I did find a journal article that applies entropy to economic theory from the Journal of Heterodox Economics :

https://content.sciendo.com/view/journals/jheec/3/1/article-p1.xml