Sublime

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.

There frankly is a hell of a lot of value in the game theory and economics literature.

Professor Howard Raiffa’s maximum bid of others (or MBOO, pronounced “maboo”) analysis, which captures the fundamental trade-off in graphical form.

In complexity economics, agents differ and in general lack full knowledge of each other and of the situation they are in. Fundamental uncertainty is therefore the norm; ill-defined problems are the norm; and rationality is not necessarily well defined. Agents explore and learn and adapt and open to novel behavior. Outcomes may not be in

rabbit. So you can think of the economy as a series of shocks moving to an equilibrium, shock, moving to an equilibrium.

The take-home message from Schelling’s story—that incentives sometimes backfire—is familiar to psychologists.