Simulating the coordination of individual economic decisions

The model of dynamic social influence is used to describe the coordination of individual economic decisions. Computer simulations of the model show that the social and economic transitions occur as growing clusters of new in the sea of old. The model formulated at the individual level may be used to derive another one concerning the aggregate level. The aggregate level model was used to simulate spatio-temporal dynamics of the number of privately owned enterprises in Poland during the transition from centrally governed to the market economy. Analysis revealed the similarity between the model predictions and economic data. (C) 2000 Elsevier Science B.V. All rights reserved.