Full-Spectrum Economics by Arnsperger Christian;Wilber Ken;

Author:Arnsperger, Christian;Wilber, Ken;
Language: eng
Format: epub
Tags: Economics, Finance, Business & Industry
Publisher: Taylor & Francis Group
Published: 2010-01-08T00:00:00+00:00

In fact, the very demanding notions of rationality and equilibrium that were so central in neoclassical economics and in Nash game theory become just one, quite small, province of the overall conceptual landscape:

To begin, the agents differ differently in the different models. [T]hey have different decision rules. Some decide by tossing coins; some (very few!) decide like homo economicus; and some play a coordination game in their social networks, where the social networks are themselves heterogeneous and dynamic. […] [For the generative social scientist,] to explain a pattern, it does not suffice to demonstrate that […] if society is placed in [a specific] pattern, no (rational) individual would unilaterally depart (which is the Nash equilibrium condition). Rather, one must show how a population of boundedly rational (i.e., cognitively plausible) and heterogeneous agents, interacting locally in some space, could actually arrive at the pattern on time scales of interest […]. Hence, to explain macroscopic social patterns, we try to “grow” them in multi-agent models. The preceding critique applies even when the pattern to be explained is an equilibrium. But what if it isn’t? What if the social pattern of interest is itself a nonequilibrium dynamic? […] [T]he agent-based generative approach can be explanatory even in such cases—where “the equilibrium approach,” if I may call it that, is either infeasible or is devoid of explanatory significance.

(Epstein 2007: xiii, xvi passim)

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