{"about":{"site":"https://codewithpapers.app","non_affiliation":"Code with Papers and Syntology are not affiliated with, endorsed by, or sponsored by Papers with Code, Meta, or the pwc-archive mirror.","licence":"CC BY-SA 4.0","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","attribution":"https://codewithpapers.app/attribution","modified":"archive material modified by Syntology; see the attribution page"},"url":"/paper/agent-based-simulations-visualize-adam-smith","title":"Agent based simulations visualize Adam Smith's invisible hand by solving Friedrich Hayek's Economic Calculus","arxiv_id":"1509.04264","date":"2015-11-25","proceeding":null,"authors":[],"abstract":"Inspired by Adam Smith and Friedrich Hayek, many economists have postulated\nthe existence of invisible forces that drive economic markets. These market\nforces interact in complex ways making it difficult to visualize or understand\nthe interactions in every detail. Here I show how these forces can transcend a\nzero-sum game and become a win-win business interaction, thanks to emergent\nsocial synergies triggered by division of labor. Computer simulations with the\nmodel Sociodynamica show here the detailed dynamics underlying this phenomenon\nin a simple virtual economy. In these simulations, independent agents act in an\neconomy exploiting and trading two different goods in a heterogeneous\nenvironment. All and each of the various forces and individuals were tracked\ncontinuously, allowing to unveil a synergistic effect on economic output\nproduced by the division of labor between agents. Running simulations in a\nhomogeneous environment, for example, eliminated all benefits of division of\nlabor. The simulations showed that the synergies unleashed by division of labor\narise if: Economies work in a heterogeneous environment; agents engage in\ncomplementary activities whose optimization processes diverge; agents have\nmeans to synchronize their activities. This insight, although trivial if viewed\na posteriori, improve our understanding of the source and nature of synergies\nin real economic markets and might render economic and natural sciences more\nconsilient.","url_abs":"http://arxiv.org/abs/1509.04264v2","url_pdf":"http://arxiv.org/pdf/1509.04264v2.pdf","source":{"archive":"pwc-archive (Hugging Face), CC BY-SA 4.0","snapshot":"2025-07-28","licence_url":"https://creativecommons.org/licenses/by-sa/4.0/legalcode","row_kind":"abstracts"},"code_links":[{"paper_slug":"agent-based-simulations-visualize-adam-smith","repo_url":"https://github.com/parvusvox/pydynamica","is_official":0,"mentioned_in_paper":0,"mentioned_in_github":1,"framework":"none","reach":null}],"tasks":[],"methods":[],"datasets_introduced":[],"methods_introduced":[],"results":[],"syntology":{"atlas_url":null,"mcp":null,"developers":"https://syntology.ai/developers"},"arxiv_metadata":null,"syntology_extracted_results":null}