When the collective acts on its components: economic crisis autocatalytic percolation

Abstract

Agent-based models have improved the standards for empirical support and validation criteria in social, biological, cognitive and human sciences. Yet, the inclusion, in these models, of vertical interactions between various aggregation levels remains a challenge. We study analytically, numerically and by simulation the generic consequences of interactions between the collective and its individual components:  the appearance of an autocatalytic loop between the dynamics of the collective and its components;  the system, which is dominated by a limited number of factors amplified by this collective↔individuals autocatalytic loop;  the microscopic features, which are not involved in the autocatalytic loop and are irrelevant at the systemic level; and  how the above clarify the interplay between macroscopic predictable features and the ones dependent on random unpredictable individual events. Using the social and market percolation framework, we study the dramatic effects of the collective↔individuals autocatalytic loop on economic crisis propagation:   the percolation transition becomes discontinuous;  there are a few relevant regions and regimes corresponding to a quite diverse range of response policy options;  there are stability ranges where appropriate policies can help to avoid macroscopic crisis percolation; and   beyond those regions the systemic crisis might become unstoppable.