Steps In the Model

Ok, at first glance, we have a lot of random people. They all have a model in their head of something they want to do.

1. First step, they have to overcome the initial difficulties in starting up this means clearing regulatory hurdles or finding ways of avoiding detection and getting funding.
   
2. Then comes the phase where they try to get more money to find the idea.
   
3. If the model matches a good way to keep functioning they stay functioning.
   
4. People modify and slightly randomise their model; also, more successful models are copied.
   
5. The entrepreneurs do business for a while.
   
6. The ones who have bad models lose.
   
7. The cycle repeats.
   

Now, this cycle happens all the time, for each entrepreneur. However step 4 means that when they go out of business (step 6) there is some tendency to do so in clusters. This explains how the .com crash and similar crashes happen.

Also, this model predicts says that if temporary methods are used to keep things afloat, the crash will be far worse in the future. This is because as long as entrepreneurial models seem successful they will be copied.

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Entrepreneurial Model

• If you provide an idea that I haven't already thought of, i'll add it, and add your name to the list with a short description of what you helped with.
  
  
• Same goes for any contributions that I deem worthy.
  
  
• I tend to think in lists, if this is a problem, tough.
  
  

Some ideas:

• No perfect foreknowledge by entrepreneurs.
  
  
• Not even perfect statistical foreknowledge
  
  
• Failure must be a part of the model, simply because a lot of entrepreneurs fail.
  
  
• Entrepreneurs must not be directly profit seeking, but its ok if profits determine whether they succeed or fail.
  
  
• It seems to me that some variation of a genetic algorithm would be useful here possibly combined with predator-prey.