Complexity Economics: Proceedings of the Santa Fe Institute's 2019 Fall Symposium

The economy is not a closed static equilibrium system; it is a system perpetually open to novel behavior, and complexity economics forces us to keep this in mind.

Those are all well understood. And they have been mathematized, heavily mathematized. They are about quantities and preferences and prices in balance, and this gives itself to the equating of things—to balance and to equilibrium.

The secret of great trading: you need to be fast in the sense of being adaptive and agile, but you can’t be erratic. You can’t get weak knees at every little spike move swaying you one way or the other. You need to be resilient through noise, but not obstinate. So, it’s that line of fast and slow, that adaptiveness, that is really key. The key to a

Similarly at equilibrium there’s no incentive for any agents to diverge from their present behavior—that’s the definition of an equilibrium. Therefore, exploitive behavior can’t happen. A subtle, muted, unconscious bias precludes ideas of exploitation or collapse.

I’d just say that the stock market has many different functions, but one of the ways it operates is as a real-time, information-processing mechanism. Information is created, stuff’s going on, it’s incorporating those into prices as they happen. So, what’s the probability that IBM will be bankrupt tomorrow? Rounds to zero. How about three years from

But also what’s interesting, we observe that it seems to be that this type of message is, “Good job, well done, we are a team, that’s the way to do it.” Those kinds of messages tend to help in succeeding, in coordinating, in the better outcome.

Most economists now accept the need for more realistic assumptions in economic theory; and methodologies such as network analysis, heterogeneous agent models, evolutionary game theory, and economic lab experiments are becoming standard.

While economic systems have important differences from biological ones, they share some deep commonalities—notably, both use energy to create islands of order, stability, and local equilibrium (or homeostasis) in larger seas of disorder, but those islands of local stability are by necessity evolving as their environment evolves, meaning that the sy

Markets become inefficient when one of these conditions is violated, and the most likely condition is almost always lack of diversity. We are social animals. Instead of believing different things, we correlate our beliefs.