Nonlinear Dynamics of Social Exclusion via a Dynamic Extension of the Classical “Market for Lemons” Theory: Scapegoating as a Critical Phenomenon and Optimal Intervention Strategies
Year: 2026
Type: article
Abstract: Akerlof’s classical theory of the “Market for Lemons,” which conceptualizes adverse selection driven by information asymmetry, established the foundation of information economics. While the traditional model assumes static equilibria among a limited number of agents, analyzing its behavioral dynamics within large-scale, complex network environments remains a highly relevant task in computational social science. This study extends the classical lemon market model into a nonlinear dynamical system on adaptive networks. We mathematically elucidate macro-level social phase transitions—specifically structural exclusion such as scapegoating and collective ostracism—induced by computational cognitive limits, and evaluate optimal intervention strategies to mitigate these systemic failures. Multi-agent simulations utilizing large-scale tensor operations demonstrate that autonomous edge rewiring under incomplete information does not merely result in the uniform displacement of high-quality goods as predicted by static theory. Instead, the network self-organizes into an irreversible structural division: a core group of influential agents monopolizes high-quality information, while marginalized agents are isolated into a peripheral “lemon echo chamber” where only low-quality information circulates. To address this structural pathology under a resource constraint limiting intervention to 10% of the total agents, we evaluated two distinct approaches. The results indicate that providing informational support to influential hubs functions as a trap that exacerbates systemic inequality, superficially elevating the overall market evaluation but permanently fixing the exclusion gap. Conversely, the forced maintenance and protection of “weak ties” bridging disconnected clusters constitutes the mathematically optimal solution to dissolve fragmentation, effectively eliminating the price gap and facilitating social inclusion. Furthermore, this study demonstrates that the mechanism of social exclusion exhibits strong hysteresis effects. A distinct tipping point governs the progression toward a fragmented lemon echo chamber. Interventions implemented after crossing this critical threshold fail to restore the system to its baseline state despite identical resource expenditure, confirming the presence of an irreversible phase transition. These findings establish that the collapse dynamics outlined in the classical lemon market serve as a generalized model for explaining contemporary collective ostracism driven by information cascades. Consequently, the analysis highlights the necessity of early intervention prior to critical thresholds and the systemic preservation of structural bypasses rather than post-hoc remediation.
Source: Games
DOI: 10.3390/g17050044
Author: Yasuko Kawahata
Institution: Rikkyo University
Language: English
Subfield: Statistical and Nonlinear Physics
Field: Physics and Astronomy
Domain: Physical Sciences
SDG: Reduced inequalities
Open Access status: gold
Estimated APC paid: $1,930
OpenAlex ID: W7204121862