Time to abandon group thinking in economics
Group thinking is the notion that animals do those things that maximize the chance of survival of their species. It is wrong because natural selection does not favor what is good for the group or the species; it favors what is good for the individual. Here, I show through examples how group thinking also pervades economics. In connection with the fallacy of group thinking, I also discuss how economics fails to ground itself in the underlying knowledge provided by biology. I also argue that economists need to redirect their conventional approach to study group behavior. Current macroeconomics is reductionist while the route followed by biology, physics, and chemistry was to resort to a different approach when focusing on macro systems made up of a large number of heterogeneous micro units. The group level pattern self-organizes as it is not encoded directly in the individual-level rules. And here the right mathematical models can help deduce hidden connections between the interactions of individuals and the patterns that emerge at the group level.
|Date of creation:||2013|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Da Silva, Sergio, 2009.
"Does Macroeconomics Need Microeconomic Foundations?,"
Economics - The Open-Access, Open-Assessment E-Journal,
Kiel Institute for the World Economy (IfW), vol. 3, pages 1-11.
- Da Silva, Sergio, 2009. "Does Macroeconomics Need Microeconomic Foundations?," Economics Discussion Papers 2009-3, Kiel Institute for the World Economy (IfW).
- Jean-Philippe Bouchaud, 2008. "Economics need a scientific revolution," Papers 0810.5306, arXiv.org.
- Suhadolnik, Nicolas & Galimberti, Jaqueson & Da Silva, Sergio, 2010. "Robot traders can prevent extreme events in complex stock markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(22), pages 5182-5192.
- Suhadolnik, Nicolas & Galimberti, Jaqueson & Da Silva, Sergio, 2010. "Robot traders can prevent extreme events in complex stock markets," MPRA Paper 23923, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:45660. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.