Complexity and Endogenous Instability

Sami Al-Suwailem

No 1203, ASSRU Discussion Papers from ASSRU - Algorithmic Social Science Research Unit

Abstract: The global financial crisis proved the critical impact of the gap between individual rationality and group rationality. This gap is not supposed to arise in a Neoclassical world, but it frequently arises in a world as complex as ours. The paper explores how endogenous instability might arise due to such a gap, and what behavioral rules might help to mitigate its impact.

Keywords: fallacy of composition; empathy; n-person prisoner’s dilemma games; n-person zero-sum games; symmetry; the golden rule. (search for similar items in EconPapers)
JEL-codes: C70 D03 D87 G01 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-gth and nep-hpe
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpas:1203

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