Brendan Markey-Towler

Narratives and Chinese Whispers: Ideas and Knowledge in Bubbles, Diffusion of Technology and Policy Transmission

In this paper we shall make use of a new theory of economic systems as networks formed by individuals acting on the basis of their psychology and social position (Markey-Towler, 2016) to obtain a new vision of the diffusion of behavioural change and the role of narratives (Shiller, 2017) therein. This vision is obtained by making use of the “Chinese Whispers�? theorem which identifies necessary and sufficient conditions for diffusion in economic systems so conceived, and the “Made to Stick�? theorem which elaborates the likelihood of ideas and narratives being incorporated into individual worldviews (Markey-Towler, 2016) whence they may influence behaviour. The diffusion of behavioural change supported by the spread of ideas is related to the emergence of bubbles, herd behaviour the uptake of technology and the effect of policy changes. The vision of these phenomena presented here is unique in that it places human psychology and the role of ideas therein at the core of a systematic model of group dynamics. A major, practical improvement for policymakers and entrepreneurs alike arrived at thus is the understanding offered of the limits of the diffusion of behavioural change as well as the extent and the manner in which this is determined by non-substitutability as much as by the network structure of the socioeconomic system. This builds on the work of Michelle Baddeley (2010); Baddeley (2013); Baddeley (2015) and constitutes an improvement on purely mechanistic models of network contagion (Newman, 2003; Gai et al., 2010; Gai et al., 2011; Giansante et al., 2012; Markose et al., 2012; Markose, 2013; Ghedini et al., 2014; Jackson et al., 2014; Acemoglu et al., 2015) as well as models of population dynamics based on predator-prey or epidemiological models (Kermack et al., 1927; Page et al., 2002; Munz et al., 2009; Foster, 2005; Haas, 2015; Klarl, 2014) which tend to obscure the role of human psychology in the diffusion of behavioural change.

On the Problem of Constructing Rational Preferences

In standard models it is typically taken for granted that preferences are given and defined over the alternatives alone, and the possibility of making a rational choice is a matter of assumption. I generalise this aspect of the economic model so that preferences over alternatives are constructed from given preferences defined over various characteristics of the alternatives under consideration. I characterise the decision problem before investigating what conditions a procedure for aggregating preferences over attributes into preferences over alternatives must satisfy in order for the latter to be rational. I then consider what the implications of these conditions for the procedural rationality of the aggregation process.In standard models it is typically taken for granted that preferences are given and defined over the alternatives alone, and the possibility of making a rational choice is a matter of assumption. I generalise this aspect of the economic model so that preferences over alternatives are constructed from given preferences defined over various characteristics of the alternatives under consideration. I characterise the decision problem before investigating what conditions a procedure for aggregating preferences over attributes into preferences over alternatives must satisfy in order for the latter to be rational. I then consider what the implications of these conditions for the procedural rationality of the aggregation process.

Anarchy, Blockchain and Utopia: A theory of political-socioeconomic systems organised using Blockchain

The basic vision of anarchism – if indeed there can be one for such a diffuse and subtle mode of political thought – is of a society entirely free of the State and all its violence and coercion. The utopia of the anarchist is no free-for-all war of all against all either. Instead, it is a society in which individuals are entirely free to elect to associate themselves with others and interact with them according to a set of rules to which those others agree.

Blockchains Evolving: Institutional and Evolutionary Economics Perspectives

For the past century economists have proposed a suite of theories relating to industrial dynamics, technological change and innovation. There has been an implication in these models that the institutional environment is stable. However, a new class of institutional technologies — most notably blockchain technology — lower the cost of institutional entrepreneurship along these margins, propelling a process of institutional evolution. This presents a new type of innovation process, applicable to the formation and development of institutions for economic governance and coordination. This paper develops a replicator dynamic model of institutional innovation and proposes some implications of this innovation for innovation policy. Given the influence of public policies on transaction costs and associated institutional choices, it is indicated that policy settings conductive to the adoption and use of blockchain technology would elicit entrepreneurial experiments in institutional forms harnessing new coordinative possibilities in economic exchange. Conceptualisation of blockchain-related public policy an innovation policy in its own right has significant implications for the operation and understanding of open innovation systems in a globalised context.

Antifragility, the Black Swan and psychology

In this paper, we develop a theory of the psychological conditions which contribute to greater survival in complex evolving socioeconomic systems ordered by radically uncertain institutions. We introduce the notion of the antifragile personality, whose personal knowledge of how and why to act in the world grows in the presence of radical uncertainty. We make use of a new theory of the mind as a network structure within and upon which the psychological process operates to elaborate the psychological properties of the antifragile personality and discuss its consonance with aspects of Jungian psychology. We extend aspects of the Schumpeterian, Kirznerian and Lachmannian entrepreneurs, as well as Ulrich Witt’s notions of the necessity of adaptability and imagination and Caroline Gerschlager’s exegesis of “agents of change” by giving them greater foundation in psychology while unifying them by showing how they identify aspects of an underlying antifragile personality. We formulate definite predictions using our theory about the psychological factors in socioeconomic success which align well with existing data and investigate how our theory offers practical advice for strategy in evolutionary socioeconomies ordered by radically uncertain institutions.

On Changing Behaviour in Fixed Psychologies: An Integrated, Holistic, Systematic Approach

We develop an integrated, holistic and systematic model of behavioural change in fixed psychologies by making use of a model of the psychology of behaviour. We identify and explain three simple and comprehensive means by which behavioural change is affected by the interaction of the individuals psychology with their environment. This has value for the pure theory of human behaviour, for applied theory (making hypotheses to appraise and to be tested by datasets), and for the practice of policy by demonstrating a fairly simple causal structure underlying the seemingly highly individuated and complex psychological processes which support behavioural change.

Economic Dark Matter: On the Theory of Substitutability

This paper proposes a model of the psychology of behaviour in which theories of economic behaviour based on the assumption of substitutability may coexist with theories based on the assumption of non-substitutability. The whole spectrum of possibilities for substitutability between courses of action is considered: substitutability, non-substitutability and complimentarity. We recover traditional economic theories of behaviour as “making tradeoffs�? when we impose the assumption of substitutability. We find that if we suppose non-substitutability there are three kinds of behaviour which may arise which aren’t the result of “making tradeoffs�? but instead could be characterised by the statements “it just doesn’t Cut It�? (in the case of basic non-substitutability), “I can’t go without this�? (in the case of non-substitutability created by the existence of needs) and “together or not at all�? (in the case of complimentarity). We thus expand the spectrum of behaviours which economic theory may explain as non-exotic and standard.

Inequality in the 21st Century

The world stands in the shadow of two great characters on the stage of history. Our steadily concentrating distribution of income, and our extraordinary information communication technology. In this little essay we shall make use of a new theoretical view of economic systems as network structures formed by individuals acting on the basis of their psychology and social position to investigate the interaction of these phenomena. We shall find that information communication technology will tend to produce a winner-take-all environment in the market economy and a concentrated distribution of income which is “hollowed out�?. But we shall also find confounding factors which restrain this tendency and with which policymakers may operate to mitigate the concentration of the distribution of income.

Economics Cannot Isolate Itself from Political Theory: A Mathematical Demonstration

The purpose of this paper is to provide a confession of sorts from an economist to political science and philosophy. A confession of the weaknesses of the political position of the economist. It is intended as a guide for political scientists and philosophers to the ostensible policy criteria of economics, and an illustration of an argument that demonstrates logico-mathematically, therefore incontrovertibly, that any policy statement by an economist contains, or is, a political statement. It develops an inescapable compulsion that the absolute primacy and priority of political theory and philosophy in the development of policy criteria must be recognised. Economic policy cannot be divorced from politics as a matter of mathematical fact, and rather, as Amartya Sen has done, it ought embrace political theory and philosophy.The purpose of this paper is to provide a confession of sorts from an economist to political science and philosophy. A confession of the weaknesses of the political position of the economist. It is intended as a guide for political scientists and philosophers to the ostensible policy criteria of economics, and an illustration of an argument that demonstrates logico-mathematically, therefore incontrovertibly, that any policy statement by an economist contains, or is, a political statement. It develops an inescapable compulsion that the absolute primacy and priority of political theory and philosophy in the development of policy criteria must be recognised. Economic policy cannot be divorced from politics as a matter of mathematical fact, and rather, as Amartya Sen has done, it ought embrace political theory and philosophy.

Ars Rhetorica Et Cogitationes Publicae, or, the Competition and Evolution of Ideas in the Public Sphere

The purpose of this essay is to develop a view of the process by which the individual becomes persuaded to accept an idea in the process of reasoning in the public sphere as part of the competition between ideas. It makes use of a model of the human mind, psychology and behaviour developed by Markey-Towler (2015) to uncover the factors effecting the fundamental exchange from whence emerges the competition between ideas at the level of the population. The value of the view thus obtained of the competition between ideas as a tool for understanding why certain ideas do or do not succeed and designing ideas so as for them to succeed in the public sphere is assessed.