Hostname: page-component-76fb5796d-25wd4 Total loading time: 0 Render date: 2024-04-25T07:38:14.563Z Has data issue: false hasContentIssue false
  • English
  • Français

Invited Discussion Paper1: Surprise, Surprise from Neoclassical Economics to E-Life2

Published online by Cambridge University Press:  09 August 2013

David Ingram ,
Paul Tayler  and
Michael Thompson
David Ingram
Affiliation:
Willis Re, New York City
Paul Tayler
Affiliation:
National Health Service, UK
Michael Thompson
Affiliation:
International Institute for Applied Systems Analysis, Laxenburg, Austria
Get access Rights & Permissions [Opens in a new window]

Abstract

We build and describe an agent-based model: the Surprise Game. The game comprises a “world” of 30 firms, each of which has to survive (and, if possible, prosper) in its environment, which is nothing more than the other 29 firms. Each firm has to latch onto one or other of the four strategies that are predicted by the theory of plural rationality but has to relinquish that strategy and latch onto one of the others if it finds itself surprised. This model illustrates the dynamics of the world as described by the theory of plural rationality which are more similar to the dynamics of the actual world than economic models that assume equilibriums that are occasionally disturbed by shocks. This model and the theory of plural rationality provide insights and ideas for further work for actuaries.

Type
Research Article
Information
ASTIN Bulletin: The Journal of the IAA , Volume 42 , Issue 2 , November 2012 , pp. 389 - 411
Copyright
Copyright © International Actuarial Association 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

1

This paper presents a new way of thinking about how markets work and different agents react to changing circumstances.

The editor invites readers to submit short discussions and longer articles that develop the ideas in a rigorous scientific direction.

2

First presented at the International Institute for Applied Systems Analysis/Konrad Lorenz Institute workshop – The Human Brain and the Social Bond, Vienna, 2010.

References

Adams, J. (1995) Risk, London: UCL Press.Google ScholarPubMed
Arthur, W.B. (1989) Competing technologies, increasing returns and lock-in by historical events: the dynamics of allocation under increasing returns. Economic Journal, 99, 116–131.CrossRefGoogle Scholar
Arthur, W.B. (2009) The Nature of Technology. London: Allen Lane.Google Scholar
Dahl, R.A. (1989) Democracy and Its Critics. New Haven, Connecticut: Yale University Press.Google Scholar
Dake, K. and Thompson, M. (1999) Making ends meet: in the household and on the planet. GeoJournal, 47, 417–424.Google Scholar
Douglas, M., Thompson, M. and Verweij, M. (2003) Is time running out? The case of global warming. Daedalus, Spring, 98–107.Google Scholar
Douglas, M. and Wildavsky, A. (1982) Risk and Culture: An Essay on the Selection of Technical and Environmental Dangers. Berkeley, California: University of California Press.Google Scholar
Elkington, J. and Trisoglio, A. (1996) Developing realistic scenarios for the environment: Lessons from Brent Spar. Long Range Planning, 29(6), 762–769.CrossRefGoogle Scholar
Grauer, M., Thompson, M. and Wierzbicki, A. (eds) (1985) Plural Rationality and Interactive Decision Processes. Berlin: Springer-Verlag (Lecture Notes in Economics and Mathematical Systems, 248).Google Scholar
Gross, J. and Rayner, S. (1985) Measuring Culture: A Paradigm for the Analysis of Social Organisation. New York, Columbia University Press.Google Scholar
Gyawali, D. (2001) Water in Nepal. Lalitpur, Nepal: Himal Books. (International edition published by Zed Books, London, as Rivers, Technology and Society, 2003).Google Scholar
Hendriks, F. (1994) Cars and culture in Munich and Birmingham: the case for cultural pluralism. In Coyle, D.J. and Ellis, R.J. (eds) Politics, Policy and Culture. Boulder, Colorado: West View Press.Google Scholar
Hood, C. (1998) The Art of The State: Culture, Rhetoric and Public Management. Oxford: Clarendon Press.Google Scholar
Ingram, D. and Underwood, A. (2010a) A The Full Spectrum of Risk Attitude, The Actuary, SOA.Google Scholar
Ingram, D. and Underwood, A. (2010b) The Human Dynamics of the Insurance Cycle and Implications for Insurers, SOA Monograph Series.Google Scholar
Ingram, D. and Underwood, A. (2010c) The Fabric of ERM, The Actuary, SOA.Google Scholar
Janssen, M. (1996) Meeting Targets: Tools To Support Integrated Assessment Modelling of Global Change. Den Haag: CIP-Gegevens Koninklijke Bibliotheek (ISBN 90-900 99 08-5)Google Scholar
Lindblom, C.E. (1977) Politics and Markets: The World's Political-Economic System. New York: Basic Books.Google Scholar
Marriott, M. (1967) Hindu transactions: diversity without dualism. In Kapferer, B. (ed) Transaction and Meaning. Philadelphia, Pennsylvania: Institute for the Study of Human Issues.Google Scholar
Minsky, H. (1992) The Financial Instability Hypothesis. The Jerome Levy Economics Institute Working Paper Series.Google Scholar
Nelson, R. and Winter, S. (1982) An Evolutionary Theory of Economic Change. Cambridge, MA: Harvard University Press.Google Scholar
Ney, S. (2009) Resolving Messy Policy Problems. London: Earthscan.Google Scholar
Osborne, G. and Thaler, R. (2010) We can make you behave. London: The Independent, 29 Jan.Google Scholar
Rapoport, A. (1985) Uses of experimental games. In Grauer, M., Thompson, M. and Wierzbicki, A. (eds) Plural Rationality and Interactive Decision Processes. Berlin: Springer-Verlag.Google Scholar
Robbins, L. (1935) An Essay on the Nature and Significance of Economic Science. London: Macmillan.Google Scholar
Schwarz, M. and Thompson, M. (1990) Divided We Stand. Philadelphia, Pennsylvania: University of Pennsylvania Press.Google Scholar
Tayler, P. (1995) Modelling artificial stock markets using genetic algorithms. In Goonatilake, S. and Treleaven, P. (eds) Intelligent Systems for Finance and Business. Chichester: John Wiley.Google Scholar
Thompson, M. (2008) Organising and Disorganising. Axminster: Triarchy Press.Google Scholar
Thompson, M. (2010) A bit of the other: why scarcity is not all its cracked up to be. In Mehta, L. (ed) The Limits to Scarcity. London: Earthscan.Google Scholar
Thompson, M., Ellis, R.J. and Wildavsky, A. (1990) Cultural Theory. Boulder, Colorado: West View Press.Google Scholar
Thompson, M. and Gyawali, D. (2007) Uncertainty revisited (new introduction). In Thompson, M., Warburton, M. and Hatley, T., Uncertainty on a Himalayan Scale. Lalitpur, Nepal: Himal Books.Google Scholar
Thompson, M. and Rayner, S. (1998) Risk and governance part I: the discourses of climate change, Government and Opposition, 33(2), 139–166.Google Scholar
Thompson, M., Rayner, S. and Ney, S. (1998) Risk and governance Part II: policy in a complex and plurally perceived world. Government and Opposition, 33(3), 330–354.Google Scholar
Verweij, M. (2000) Transboundary Environmental Problems and Cultural Theory: The Protection of The Rhine and The Great Lakes. Basingstoke and New York: Palgrave Macmillan.Google Scholar
Verweij, M. (2006) Is the Kyoto protocol merely irrelevant, or positively harmful, for efforts to curb climate change? In Verweij, M. and Thompson, M. (eds) Clumsy Solutions for a Complex World. Basingstoke: Palgrave Macmillan, 31–60.Google Scholar
Verweij, M. (2011) Clumsy Solutions For A Wicked World: How To Improve Global Governance. Basingstoke: Palgrave Micmillan.Google Scholar
Verweij, M. and Thompson, M. (eds) Clumsy Solutions for a Complex World. Basingstoke: Palgrave Macmillan.CrossRefGoogle Scholar
Williamson, O. (1975) Markets and Hierarchies, New York: Free Press.Google Scholar