Berlin 2024 – scientific programme

Parts | Days | Selection | Search | Updates | Downloads | Help

SOE: Fachverband Physik sozio-ökonomischer Systeme

SOE 5: Award Session: Young Scientist Award for Socio- and Econophysics (YSA)

SOE 5.1: Invited Talk

Monday, March 18, 2024, 16:15–16:45, MA 001

Radical Complexity and Bounded Rationality — •jean-philippe bouchaud — CFM, 23 rue de l'Université, 75007 Paris

Traditional economic theory assumes that agents are rational, or at least that they learn to be after interacting with their environment. As a schematic model of the complexity economic agents are confronted with, we introduce the ``SK-game'', a discrete time binary choice model inspired from mean-field spin-glasses. We show that even in a completely static environment, agents are unable to learn collectively optimal strategies. This is either because the learning process gets trapped by a sub-optimal fixed point, or because learning never converges and leads to a never ending evolution of agents intentions. Contrarily to the hope that learning might save the standard rational expectation framework in economics, we argue that complex situations are generically unlearnable and agents must do with ``satisficing'' solutions, as argued long ago by Herbert Simon.

Keywords: Complexity; Learning; Bounded Rationality; Spin-Glasses