Riccardo Boero, Pietro Terna

From the invisible hand to the social interaction

  • Abstract

Informations and abstract

Keywords: agent-based models, experimental economics, neuroeconomics, cognitive economics.

The economic science has traditionally considered the price system as a condensation of all the necessary and relevant information. The invisible hand, a little unfairly attributed to Smith in a naive version, or the as if principle of Friedman, represent the related theoretical instruments: prices signal scarcity and abundance, individuals are optimizer, everything tends toward equilibrium. Some components of «certain» importance are missing parts in that context... the spatial dimension, the technology, the artificial structures such as derivative in finance ... Mainly, what is missing is the dimension of the social interaction: innovation and behaviors spread through networks of relationships; the decisions of individuals, forgetting the optimizing assumptions, are referred to social contexts. To deal with these issues, the economic science needs inter-disciplinary cooperation, especially with psychology, needs new tools, such as simulation (agent-based), experiments, and neuroscience.

Article first page

Article first page