Original source: SimoleonSense.com .
photo credit: h.koppdelaneyInteresting find via the Herd Blog. Basically the argument is simple; Is thinking really an individual function or a social function? I dare say I’d slap a bit of reflexivity in between and call it a complex system.Yar!
Excerpt (Via Herd)
Behavioural Economics is a response – a step on – from the old rational agent model of human behaviour. It conceptualises humans not as rational agents who accurately perceive the world around them and act appropriately but as faulty agents, with lazy minds (as Kahnemann puts it) – with built-in quirks and biases in our perceptional machinery.
But – and here’s the big thing – it still views humans as at heart independent agents; human behaviour as grounded fundamentally at the level of individuals.
Of course, BE represents a big improvement on the old model and we’d all do well to get a grip on the insights it offers and I can see how much easier it is to slip from rational agent models to the kind of faulty agent models implied by BE…but let’s be honest: it’s only half way to a proper rethink.
The real breakthrough is likely to come from starting to conceptualie humans and human behaviour as fundamentally social (not individual).
Try this: is thinking an individual or social function?
- Models of bounded rationality and the credit environment
- Bounded Rationality Models & The Credit Environment
- A [Complete] Survey of Behavioral Finance
- Individual rationality can mean collective irrationality & An Institutional Theory of Momentum and Reversal
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