Schellingmodelofsegregationexplainstheselfsortingbehavior(ofagents).Itexplainswhyin citieswithlesstolerantpeople,westillseehighdegreeofsegregation.Withlowlevelof tolerance(micromotive)westillendupseeingastarkamountofsegregation(macrobehaviour). Soamicromotivemaynotendupproducinganequivalentmacrobehaviourinagentbased models.Forselfsortedagentsystems,therecanbetwotypesofequilibriumdisturbingevents (Tipping)whenoneagentmovesintoalocalityitcancauseotheragentstomoveout(Genesis tip),andmovingoutofoneagentfromonelocalitycancause/tiptheexitofotheragents(Exodus tip)fromthesamelocality. PeerEffectmodelexplainshowanuprising/movementcanbecausedbytwofactors.First,low valueofaveragethreshold(AnagentwillonlyjointhemovementifXnumberofotherpeople havejoinedthemovement).Andsecondisthedistributionofthethresholdvalues.E.g.ifthe distributionisright,evenwithhighaveragethresholdvalues,themovementcanspread.And evenwithlowaveragevalueofthresholdthemovementcandieout.Also,howveryfew extremists(withlowthresholds)whoarewellconnectedcancauseamovement/uprising(Tail waggingthedog).

StandingOvation(SO)modelexplainwhataffectstheagentstoact(SOisanact).Thismodel cangiveusclueaboutwhatcanbedonetoinfluencepeopletotakeanaction(Collectiveaction, workharderinjobs,Fitness&health).Firstisthequality(Q)ofperformace,higerqualitygreater theprobabilityofSO.Lowerthethreshold(T)forSO,highertheprobabilityofSO.Higherthe peereffect(lowerX),higertheprobabilityofSO.MorevariationinthepercievedqualityofQ(E error,diversity),higerthechancesofSO.Also,thevisibilityofanagentisimportantwhenweare consideringthepeereffect.Somepeoplearemorevisibileandhavehigherinfluence(e.g. peoplesittingonthefrontrowarevisibiletoeverybodyintheauditoriumandiftheystandit's visibiletoeverybody,i.e.theyarecelebrities).AnotherfactoristheBiggroupsfactor,ifone personinagroupstands,everybodyinthatgroupstandssoitmakessensetohavepeople comeinbiggroups. CentralLimitTheoremexplainsthethepropertiesofrandomlydistributeddata.Arandomdata (independentoutcomesandfinitevariancei.e.nohugeoutlier)followsanormaldistribution/bell curve.Tossofacoin,weightofbaggagesinairplane,no.peopleshowingupforaflight,allfollow anormaldistribution.Thestandarddeviation(sigma)andthedistributionofdataaroundthe mean(68%pointswithinsigma,99.9%within3sigmaetc.) SixSigmaprocessisaqualitycontrolideawhereinyoustriveforthequalityofproducttofall within6sigmarange. Agregationsimplethingsfollowingsimplerules,canaggregatetocomplexsystems.E.g.the gameoflifewhereeachcellfollowssimplerulebutwitheachiterationsweseecomplex structures/patternstakingshape.Forspecificinitialconfigurationsforthesecells,thesesimple rulesseemtocreateindependentlybehavinglivingorganismsandtheysometimesmove/glide acrossthespace.Givessomeclueabouthowthecomplexlookingnuronsinthehumanbrain

mightbefollowingsomesimplerulesindividually. CellularAutomataModelRuleswherethecellsareinterdependentproducecomplexand randompatterns.Oneintrepretationisthatthebigbangstartedwithcertainbasicrulesbetween interdependentcellsandthethecurrentuniverseistheresultofthoserules. PreferenceAggregationIndividualrationalpartscanaggregatetoanirrationalcollective. MulticriteriaDecisonMakingYoulistoutallthechoicesandallthecriteriaandselectawinnerin eachcategoryandaddthefinalscoretodecidewhichonetochoose(Qualitative).Youcanalso addweightstoeachcriteriabasedonyourpersonalpreferenceandcomeupwithascorefor eachchoiceanddecide(Quantitative).Thismodelhelpsyoutomakebetterdecisionandalso tellyouaboutpeople'spreferences/choices. SpatialChoiceModelYoutakeanidealpointonspace(idealvaluesforeachcriteria)andthen calculatetheabsolutedistanceofeachcriteriaofachoicefromtheidealvalueofthatcriteria andsumuptheabsolutediffforeachchoice.Thechoicewithleastdistancefromyourideal pointwins. ProbabilitiesClassicalprobabilityiswhereweknowtheprobabilitiesofeventsmathematically (rollofadice),Frequencyprobabilityiswhereweknowtheprobabiltiybasedonthepastdata (frequencyofeventsinthepast).Subjectiveprobabilityiswherewedon'tknowandmakea guess(Marketpricesetc.).Subjectiveproabilitiesarepronetoerror(huristicsandbias),sowe needtoreplacesubjectiveproabilitywithmodelprobabilitywhereweestimatetheprobabilty basedonmodels. DecisionTreesandvalueofinformation. AgentBasedmodels(Howpeople/agentsbehaveandtakedecisions)RationalAgentModel, BehaviouralandRulebased.RationalAgentModelassumesthatpeoplearerationalandalways maximize/optimize(decisioncontextwheremypayoffdependsonlyonme).Thismaynotbe truealwaysbuthelpsussolveproblemslikegametheorywhereweassumethatotherpersonis rationalandthenmakeourchoiceaccordingly.Behavioralanamoliestellusthatpeoplearen't alwaysrationalandinsomecasestheyshowsystematicirrationalbehaviourPropecttheory, Hyperbolicdiscounting,StatusquobiasandBaserate.Rulebasedmodelsarecategorized fixed(mostdirectrouteoralwaysbargainwith10%lessthantheaskingpriceortitfortatrule), decision,adaptive(gradient/randomi.e.trialanderror,bestresponse,cloning,),game. CategoricalModelYoucreatecategories(basedonsomemodelassumption)andlumpthe datainthosecategories.Bydoingdotheamountofvariationthatisreducedbecauseofthis categorization(rsquared)tellsyoutheeffectivenessofthemodel.Youtakethevariationininitial uncategorizeddata(A)andaftercategorization,youtakethesumofvariationsofdataforeach category(B).rsquared=(AB)/A

PercolationModelThismodelfromphysicsstatesthatatcertainthresholdlevelofdensity, watercanpercolatefromsurfacetothebottom.Thisparticularvalueofthedensityofthe mediumisthetippingpointforpercolation.Thiscanbeextendedtotheforestfire,whereapart fromotherfactorslikewindspeedtemperature,thereisacertaindensityoftheforestbelow whichthefiredoesn'tspread,butabovethatvaluethefireisabletospreadacrosstheforest. Thiscanalsobeappliedtothefailureofbanksinanetwork,orfailureofeconomiesinaclosely networkedcountries.Inscientificdiscoveryalso,aproblemwhichremainsunsolvableforlong, suddenlygetssolutionfromlotofpeople.Itcanbevisualizedusingthepercolationmodelwhere atsomepoint,enoughtnumberofboxesarefilledandamultiplepathsarecreatedatsome valueofdensityforthatboxedarea. DiffusionModelThiscreateaanScurve.Whereinitiallytherateofgrowthacceleratesand thenlaterdiesdowncreatinganScurve.Thetwoinflexionpointsinthecurvecan'tbecalledas tippingpoints. SISModelExplainstheconceptofreproductionnumberforadiseasewhichdependsonthe transmissionrate,rateofcontactbetweenpeopleandtherecoveryrateofthedisease.A diseasewillspreadifthereproductionnumberisgreaterthan1.Similarlyforavaccinationto stopthespreadofthedisease,acertainminimumpercentageofpopulationneedstobe vaccinated.Soforfluethereproductionnumberis3soitspreadsinabsenseofvaccination,and needsatleast66%ofthepopulationtobevaccinatedforstoppingthespread.Formeaslesthe reproductionnumberis15soit'shighlyspreadableandvaccinationpercentageneedstobe 14/15,formumpsit'sreproductionnumberis5andvaccinationpercentageis4/5etc. DirectandContextualTippingPointsWhenadirectchangeinthevariablecausesthesystem totip,it'sDirect.Whentheenvironmentinwhichthesystemsis,changesandcausesatrigger tobecomethetippingpoint.E.g.aneventwhichstartedtheWorldwar2,wouldnothavecaused theWW2,ifallthetensionthatwasbuildingupbeforethewarwasn'tthere. TippingPointscanbemeasuredusingtheconceptsofDiversityandEntropy.Diversitytellsyou thenumberoftypesofpossibleoutcomesandEntropytellsyoutheamountofinformation neededtofindouttheTypesofoutcomes. EconomicgrowthismeasuredusingtheGDPofacountry.An8%growthisconsideredtobe tremendous.AdevelopedcountrylikeUShas34%ofGDPgrowthsincepast50years.China hasbeenexperiencinga810%growthsincelast15years,whichcan'tbesustainedforeverand it'sbeleivedthatthisratewilleventuallycomedownto34%. Ruleof72.Tofindoutthenumberofyearsittakestodoublewitharateofnwedivide72byn gettheanswer.Theideaofcontinuouscompoundingsaysthatinterestispaidevery second/hour/dayoftheyearwhichgivetheformulaofcompoundinterestasp*e^rt.

BasicGrowthModelThegrowthmodelfollowsasdiminishingreturnscurve.Therecomesa pointinthegrowthwherethenewinvestmentsingrowthiscounteredbythedepreciation.Atthis stagethegrowthstallssinceitdependsonthesavingsratewhichisconstant.That'swhere innovationisneededtocounteracttheforceofdepreciation. SolowGrowthModelItaddsafactorforinnovation.Anntimesincreaseinoutputbecauseof innovationincreasestheequilibriumoutputincreasesbyn^2andthat'sbecauseofincreased productivityasaresultofinnovation,morelabourperpersonandmoremachinesbecauseof increasedproductivity.Soifinnovationincreasestheoutputbyafactorof3,onlongrunthe equilibriumGDPwillincreaseby9folds. China'shighgrowthratecanbeexplainedwiththehighinfusionofcapital.Butanoutputwhichis drivenbyhighcapitalinfusionwillreachanequilibriuminabsenseofinnovation.Withconstant innovationfactor,overtimethegrowthratewilleventuallycomedownto34%. Aconstantinnovationiswhat'srequiredforsustainedgrowthrateonalongterm.Astrong centralgovernmentcanplayabigroleinpromotinginnovationbycreatingincentivesforthe industriestoinnovate.Modelalsosuggeststhatsometimescreativedestructionisrequiredfor growth,whereoldindustriescanbecompletelywipedoutbynewtechnologybutstillcreate moregrowthoverall.