Re: Duncans work on statistical mechanics and economics

From: Phil Dunn (pscumnud@DIRCON.CO.UK)
Date: Tue Jul 06 2004 - 14:16:16 EDT

>Hi Paul
>The link is equilibrium, I think.  Physical thermodynamics and GE
>are both dterministic equilibrium theories.  But energy in the GE
>version is not physical energy. It does not enter into the physical
>conservation of energy equations. The first law in GE thermodynamics
>is the conservation of the number of commodities in exchange.
>Similarly for temperature.  In one example, temperature is inversely
>related to the rate of interest.  But I think it would be wrong to
>see a low interest rate regime as in some way 'hotter' than a higher
>interest rate regime.  In an irreversible change, where the change
>in entropy is equal to the change in utility, I think it is wrong to
>think of the increase of entropy as indicating greater disorder.
>There is just a formal correspondence between the behavioural
>'one-way rules' of non-decrease in entropy and non-decrease in
>I share you doubts about utility/preference orderings taken as
>given.  But, when considering reversible changes near equilibrium,
>the orderings and cardinal utilities could simply be regarded as
>Paul C wrote:
>>I am just rather uneasy about having each agent as
>>a thermodynmaic system since I have doubts about the
>>reality of the utility schedules on which it is based
>>and also to me entropy seems so tied up with integrals
>>over probabilities that I have difficulty equating
>>it with utility

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