Science Advances

The concept of equilibrium is the basis of many economic models, including models used by policymakers on issues like monetary policy, climate change, trade policy and the minimum wage. In a paper published in Science Advances, Marco Pangallo, Dr Torsten Heinrich and Professor Doyne Farmer of INET investigate this question in the simple framework of normal form games and show that when the game gets complicated this assumption is problematic. If these results carry over from games to economics, this raises deep questions about economic models and when they are useful to understand the real world.