Abstract
Rational outcomes of a social system do not necessarily require its individual participants to be rational. In macro systems, aggregate properties distinct from the behavior of their micro level components can emerge through complex interactions. Caution in building social sciences on assumption of methodological individualism seems appropriate.
References
Angerer M, Huber J, Shubik M, Sunder S (2010) An economy with personal currency: theory and experimental evidence. Ann Finance 6(4):475–509
Arrow KJ (1994) Methodological individualism and social knowledge. Am Econ Rev 84(2):1–9
Becker GS (1962) Irrational behavior and economic theory. J Polit Econ 70(1):1–13
Crockett S, Spear S, Sunder S (2008) Learning competitive equilibrium. J Math Econ 44:651–671
Farmer JD, Patelli P, Zovko II (2005) The predictive power of zero intelligence in financial markets. Proc Natl Acad Sci 102(6):2254–2259. https://doi.org/10.1073/pnas.0409157102
Ferguson A (1995) [1767] An essay on the history of civil society. Cambridge University Press, Cambridge
Gigerenzer G, Todd PM, ABC Research Group (2000) Simple heuristics that make us smart. Oxford University Press, Oxford
Gode DK, Sunder S (1993) Allocative efficiency of markets with zero intelligence traders: market as a partial substitute for individual rationality. J Polit Econ 101(1):119–137
Gode DK, Sunder S (1997) What makes markets allocationally efficient? Q J Econ 112(2):603–630
Gode DK, Sunder S (2004) Double auction dynamics: structural effects of non-binding price controls. J Econ Dyn Control 28(9):1707–1731
Hayek FA (1945) The use of knowledge in society (PDF). Am Econ Rev 35(4):519–530
Huber J, Shubik M, Sunder S (2010) Three minimal market institutions: theory and experimental evidence. Games Econ Behav 70:403–424
Jamal K, Sunder S (1996) Bayesian equilibrium in double auctions populated by biased heuristic traders. J Econ Behav Organ 31(2):273–291
Plott CR, Sunder S (1982) Efficiency of Experimental Security Markets with Insider Information: An Application of Rational-Expectation Models”. J Polit Econ 90(4):663–698
Plott CR, Sunder S (1988) Rational expectations and the aggregation of diverse information in laboratory security markets. Econometrica 56(5):1085–1118
Simon HA (1957) Models of man. Wiley, New York
Smith A (1977) [1776] An inquiry into the nature and causes of the wealth of nations. University of Chicago Press, Chicago. ISBN 0-226-76374-9
Smith VL (1962) An experimental study of competitive market behavior. J Polit Econ 70(2):111–137
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Prepared from remarks delivered at Humboldt-Kreis on Physics and Decisions, Berlin, Dec. 4–6, 2019. I thank the participants, and editors Shabnam Mousavi and Christian Schade for their helpful comments. I am grateful to Elizabeth Viloudaki for copy editing.
Rights and permissions
About this article
Cite this article
Sunder, S. Rational order from ‘irrational’ actions. Mind Soc 19, 317–321 (2020). https://doi.org/10.1007/s11299-020-00245-1
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11299-020-00245-1