Sean Carroll's Mindscape: Science, Society, Philosophy, Culture, Arts, and Ideas 293 | Doyne Farmer on Chaos, Crashes, and Economic Complexity
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Oct 21, 2024 
Doyne Farmer, Director of the Complexity Economics program at Oxford, dives into the chaotic nature of economies and the inadequacies of traditional economic models. He highlights how chaos theory can reshape our understanding of financial systems and promote more accurate predictions. Farmer critiques the reliance on equilibrium, advocating for models that embrace dynamic interactions and real-world complexities. He also draws fascinating parallels between economic systems and ecological dynamics, exploring how innovation intertwines with complexity in markets.
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Beating Vegas
- Doyne Farmer and his friends used a wearable computer to predict roulette outcomes in Vegas casinos.
- This endeavor, documented in "The Eudaemonic Pie", didn't yield a fortune but proved the concept.
Complexity vs. Traditional Economics
- Complexity economics utilizes tools and philosophies from complex systems science.
- This differs significantly from traditional economics, despite its references to figures like Adam Smith.
Two Economic Approaches
- Traditional economics assumes rational agents maximizing utility in equilibrium, often using equations.
- Complexity economics models agents with varying decision-making methods, focusing on emergent dynamics and disequilibrium.
