What computer science can teach economics (2009)
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What computer science can teach economics (2009)
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Re: What computer science can teach economics (2009)
#2H. Simon was among the founders of artificial intelligence and a very important microeconomicist, and I have often thought that these disciplines are not fundamentally different. What problem does backpropagation solve? Credit assignment. What problem does the market solve? Credit assignment. How do they do it? Localization of computation.
Re: What computer science can teach economics (2009)
#3Economics is a highly inbred field, which makes it very difficult to transmit cross-disciplinary information. The recent popularity of machine learning in the field might be a rare exception.
Economists only cite other economists. One of my colleagues put it this way: if you write a paper that is interesting to economists, and an economist finds it and does some follow-up work, that paper will get all the citations from economists.
Re: What computer science can teach economics (2009)
#4The article is mostly about game theory, which has been a staple of economics for quite a while.
That said, I would be very wary of jumping to such endeavors simply because a particular branch of mathematics appears to supply a useful vernacular for a particular economic problem. More often than not, it leads to a situation where instead of offering new perspectives on problems, you simply repeat the same Walrasian equilibrium analysis or whatever orthodoxy, but in a more pompous language.
In fact, by far the most mind-bending and mentally invigorating economists have been those who have almost no mathematical analysis whatsoever. These include, for instance, GLS Shackle and Ludwig M. Lachmann. Their entirely verbal analyses has expanded understanding of real-world economic phenomena far more than papers on game theory, I'd argue.
Mathematical economics like the Solow-Swan growth model, Cobb-Douglas production functions, Walrasian auctioneer markets and Paretian static equilibrium models have sowed great confusion and unrealistic assumptions as much as they may have enlightened. A lot of misunderstandings on economic policy originate from taking comparative statics models too literally.
That said, there might be some use of theoretical CS. I've had the impression that process algebras like Hoare's CSP for modeling concurrency can be used for some microfoundations and thought experiments. I don't think any economist has done this yet.
Re: What computer science can teach economics (2009)
#5>Finally, he says, it may be that where the Nash equilibrium is hard to calculate, some approximation of it — where the players’ strategies are almost the best responses to their opponents’ strategies — might not be. In those cases, the approximate equilibrium could turn out to describe the behavior of real-world systems.
I often think about how death and pain affect economic decisions. Someone who is poor and must be paid next week or start to go hungry, for example, makes much different economic decisions than someone who still needs to work to eat but has a cushion -- they can go several months without pay without risking starvation hunger. Even though they are in similar danger over time periods that are not too different, the second groups act as if it is no danger at all.
So there is a time horizon dependency at the moment of decision. I wonder how the complexity of the likelihood calculation affects the falloff rate of the death or pain variable? I wonder if we are constantly making these rough approximations and have some intuitive sense of when the numbers get too fuzzy to be meaningful and at that point get ignored?
Does somebody know of any resources that may have dealt with the economics of desperation?
Re: What computer science can teach economics (2009)
#6i love how CS people always assume everyone in every other field is just slacking off waiting on the programmers to assist them with their elite knowledge about things no one else has considered
Re: What computer science can teach economics (2009)
#7i love how CS people always assume everyone in every other field is just slacking off waiting on the programmers to assist them with their elite knowledge about things no one else has considered
I think it has to do with how integral computers are to every other field. Like if everything deeply depended on woodworking to function, carpenters would be offering input on everything.
Re: What computer science can teach economics (2009)
#8i love how CS people always assume everyone in every other field is just slacking off waiting on the programmers to assist them with their elite knowledge about things no one else has considered
Actually economists are easily the worst offenders of any field - they even gave a name to it, "economic imperialism"
Re: What computer science can teach economics (2009)
#9i love how CS people always assume everyone in every other field is just slacking off waiting on the programmers to assist them with their elite knowledge about things no one else has considered
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Re: What computer science can teach economics (2009)
#10>Finally, he says, it may be that where the Nash equilibrium is hard to calculate, some approximation of it — where the players’ strategies are almost the best responses to their opponents’ strategies — might not be. In those cases, the approximate equilibrium could turn out to describe the behavior of real-world systems. I often think about how death and pain affect economic decisions. Someone who is poor and must b…
You're right, there have been several economics studies showing that poverty causes stress which makes it more difficult to make decisions that are "rational" in a classical economics sense, such as sacrificing in the short-term for a long-term pay off. Searching "behavioural economics poverty" turns up a lot of good articles, here's an overview:
http://www.economist.com/news/finance-and-economics/21635477...