Category Spotlight #9 — Economics & Society: 8 Simulations Explained

Social systems produce emergent complexity from simple agent rules — bank runs from rational fear, segregation from mild preference, city growth from local density incentives. These eight simulations show the hidden mechanics of economic and social phenomena.

8
simulations
4
sub-topics
ABM
core method
EN + UK
languages

Financial Systems & Market Dynamics

Financial crises are rarely caused by fundamentally insolvent institutions — they are often coordination failures. In the bank run model, each depositor's decision to withdraw depends on their expectation of what others will do, creating a self-fulfilling prophecy that is impossible to prevent with purely economic tools.

Agents observe queue length at a bank. When withdrawal queues exceed a psychological threshold, rational agents join the queue — a coordination game with two Nash equilibria. Vary reserve ratio and information transparency.
ABM · game theory
SHA-256 hash difficulty in real time. Adjust the number of miners and difficulty target; the simulation shows hashrate, expected block time and how difficulty retargeting keeps the 10-minute interval stable.
Proof-of-work · hash distribution
Key insight: Nash Equilibrium in Bank Runs

There are two Nash equilibria: all depositors wait (stable bank) or all withdraw simultaneously (run). Which equilibrium occurs depends entirely on the initial coordination signal — sunspot theory explains why genuine crises can start with no fundamental cause.

Urban Growth & Spatial Society

Cities are far-from-equilibrium systems. Small differences in early population distribution create path-dependent spatial structures. The city growth cellular automaton uses only local density rules but produces organic-looking urban cores, suburbs and sprawl patterns that match real satellite imagery statistics.

Each cell becomes urban if a quorum of its eight Moore neighbours are urban. Vary the threshold from 2 to 6 and watch the city crystallise slowly (high threshold) or explode into sprawl (low threshold).
CA · Moore neighbourhood
Why buses arrive in pairs. A single bus running slightly late picks up more passengers, slows down further, and the next bus picks up fewer — a positive feedback loop that bunches the fleet despite a rigid timetable.
ABM · positive feedback

Decision Theory & Game Theory

Decision trees and game-theoretic models underlie every strategic interaction from voting to auctions. The decision tree simulation implements a CART-style learner that builds a binary classification tree from labelled data, and lets you probe where the decision boundary sits.

Interactive binary classifier built in real time. Choose a dataset (moons, circles, blobs), drag training points, and watch the Gini-impurity-minimising tree restructure. Visualises information gain at each node split.
CART · Gini impurity
Monte Carlo simulation of basic strategy vs. dealer. Run 100,000 hands to measure the house edge (typically −0.5%) and verify optimal stand/hit/double decisions that match the four-deck basic strategy table.
Monte Carlo · expected value

Cryptography & Secure Communication

Animated walkthrough of public-key agreement: Alice and Bob exchange colours (modular exponentiation) in the open without revealing the shared secret. The discrete logarithm problem is what makes it hard to reverse.
Modular arithmetic · discrete log
Encrypt and decrypt text with shift (Caesar) or polyalphabetic (Vigenère) ciphers. Frequency analysis visualisation shows why Caesar is trivially breakable while Vigenère survives longer — but not indefinitely.
Substitution cipher · frequency analysis

Core Algorithms in Economics & Society Simulations

Agent-Based Modelling (ABM) Nash Equilibrium analysis Cellular Automaton (Moore neighbourhood) CART decision tree (Gini impurity) Monte Carlo expected value Positive feedback / tipping points SHA-256 proof-of-work Modular exponentiation (DH)

Recommended Learning Paths

Economics & Social Science Students

Computer Science & Cryptography

Emergent complexity: Every simulation in this category produces macro-level phenomena (bank panics, segregated cities, traffic bunching) from micro-level rules that contain no mention of the macro phenomenon. This is the central insight of agent-based modelling — and it cannot be understood from the equation alone.