More books by Tom Siegfried…
“A Code of Nature must accommodate a mixture of individually different behavioral tendencies. The human race plays a mixed strategy in the game of life. People are not molecules, all alike and behaving differently only because of random interactions. People just differ, dancing to their own personal drummer. The merger of economic game theory with neuroscience promises more precise understanding of those individual differences and how they contribute to the totality of human social interactions. It's understanding those differences, Camerer says, that will make such a break with old schools of economic thought. "A lot of economic theory uses what is called the representative agent model," Camerer told me. In an economy with millions of people, everybody is clearly not going to be completely alike in behavior. Maybe 10 percent will be of some type, 14 percent another type, 6 percent something else. A real mix. "It's often really hard, mathematically, to add all that up," he said. "It's much easier to say that there's one kind of person and there's a million of them. And you can add things up rather easily." So for the sake of computational simplicity, economists would operate as though the world was populated by millions of one generic type of person, using assumptions about how that generic person would behave. "It's not that we don't think people are different—of course they are, but that wasn't the focus of analysis," Camerer said. "It was, well, let's just stick to one type of person. But I think the brain evidence, as well as genetics, is just going to force us to think about individual differences." And in a way, that is a very natural thing for economists to want to do.”
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