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Occupational arbitrage equilibrium as an entropy maximizing solution
The European Physical Journal Special Topics ( IF 2.6 ) Pub Date : 2020-07-07 , DOI: 10.1140/epjst/e2020-900140-9
Ravi Kanbur , Venkat Venkatasubramanian

A standard critique of attempts to apply entropy-maximizing perspectives to income distribution phenomena in economics is that they do not have appropriate characterizations of individuals making choices, which is at the core of economic modeling. This paper presents a possible bridge between these two seemingly separate universes of discourse. With a specific illustration we show that a conventional model of choice between occupations by individuals can lead to an economic equilibrium which can also be characterized as an outcome which maximizes the entropy of the distribution of individuals across occupations (and hence across incomes). This occupational choice interpretation can provide economic and institutional basis to what has, up to now, often been characterized as somewhat mechanical translation of methods from one discipline to another, without substantive content. The illustrations provided in the paper are a first step in exploring the possible linkages between occupational choice and maximum entropy approaches in modelling income distribution outcomes.

中文翻译:

职业套利均衡作为熵最大化的解决方案

试图将熵最大化的观点应用于经济学中的收入分配现象的标准评论是,它们没有对做出选择的个人进行适当的刻画,这是经济建模的核心。本文提出了这两个看似分离的话语世界之间的可能桥梁。通过一个具体的例子,我们表明,个人在职业之间进行选择的传统模型可以导致经济均衡,该经济均衡也可以被描述为一种结果,该结果可以最大化个人跨职业(进而跨收入)的分布熵。这种职业选择的解释可以提供经济和制度基础,直到现在,通常被认为是某种方法从一种学科到另一种学科的机械翻译,没有实质内容。本文提供的说明是探索职业选择和最大熵方法在建模收入分配结果之间可能联系的第一步。
更新日期:2020-07-07
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