A Dynamic, Signals-Based Reinterpretation of Microeconomic Theory
Fuente:
arXiv
Saved in:
| Main Author: | |
|---|---|
| Format: | Preprint |
| Published: |
2025
|
| Subjects: | |
| Online Access: | |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1866911127232839680 |
|---|---|
| author | Shah, Sarang |
| author_facet | Shah, Sarang |
| contents | Economics has long been a science of static equilibria, in which time is a second-order rather than first-order concern. Without time, economic modelers may neglect or obscure the role of time-dependent phenomena, e.g. path-dependency, and limit their ability to compare agnostically the model results with empirical observations. In this article, I outline a dynamic, signals-based recipe for building microeconomic models from traditional static models. I demonstrate this recipe using a classic "desert island" Robinson Crusoe (RC) model of consumption. Starting from a classic static derivation, I then move to a dynamic view, using the utility function as a generator of force on consumption. Finally, I show that the resulting dynamic model may be expressed in Lagrangian and Hamiltonian terms. I conclude by suggesting a recipe for scientific iteration using these alternate mechanical formulations, and the alternative explanations these dynamic models may suggest compared to employing a static approach to modeling. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2508_20268 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | A Dynamic, Signals-Based Reinterpretation of Microeconomic Theory Shah, Sarang Theoretical Economics Physics and Society General Finance Economics has long been a science of static equilibria, in which time is a second-order rather than first-order concern. Without time, economic modelers may neglect or obscure the role of time-dependent phenomena, e.g. path-dependency, and limit their ability to compare agnostically the model results with empirical observations. In this article, I outline a dynamic, signals-based recipe for building microeconomic models from traditional static models. I demonstrate this recipe using a classic "desert island" Robinson Crusoe (RC) model of consumption. Starting from a classic static derivation, I then move to a dynamic view, using the utility function as a generator of force on consumption. Finally, I show that the resulting dynamic model may be expressed in Lagrangian and Hamiltonian terms. I conclude by suggesting a recipe for scientific iteration using these alternate mechanical formulations, and the alternative explanations these dynamic models may suggest compared to employing a static approach to modeling. |
| title | A Dynamic, Signals-Based Reinterpretation of Microeconomic Theory |
| topic | Theoretical Economics Physics and Society General Finance |
| url | https://arxiv.org/abs/2508.20268 |