Information, networks, and markets

About this programme

Content The course introduces information theory, network theory and game theory to characterise and model systems that cannot be treated with the fully ordered or unordered interaction models of statistical physics. A perfect magnet or an ideal gas consists of indistinguishable parts that interact without intentions in completely ordered or disordered structures. Few interesting systems in nature can be described with such simple models. Social and economic systems often consist of unique elements that interact with specific intentions and exchange information in complex structures. But just as for simple systems such as magnets and gases, the key to understanding social and economic systems is to link microscopic descriptions with macroscopic phenomena. By combining basic knowledge and understanding within information theory, network theory, and game theory, we derive simple models to understand the fundamental mechanisms of aggregate behaviour in markets. Starting with the concept of entropy, we derive basic concepts in information theory in order to mathematically describe the important role of information in social and economic systems. The network part of the course addresses crucial effects that arise because the interaction patterns are often neither fully ordered nor completely unordered. The game theory part deals with mathematics to describe situations when the outcome of interactions between different individuals depends on the intentions or strategies of each individual.