by Peter Baudains, UCL Research Assistant

The aim of this workshop was to establish the building blocks of complexity economics in the form of elementary models for common behaviours displayed in economic systems. The scale of this ambition however, quickly became apparent and there was caution that a new theory of complexity economics should not be seduced by elegant mathematical theories but should exhibit observed processes from real-world systems.

The first day focused on the behaviour of agents in economic systems and started with a series of presentations from participants. Kristian Lindgren talked on evolutionary game theory using the example of a finitely repeated prisoner’s dilemma. When the popular ‘tit for tat’ strategy is employed with mistakes and mutations present, the cooperation of the players converges to small oscillations. Kristian used the Nash Equilibrium of this game to demonstrate that rational reasoning doesn’t incorporate all human behaviour. Gerard Weisbuch talked on the issues regarding the introduction of green technology, examining under what constraints green technologies will survive and indeed prosper and how could governments react. Gerard presented a model which exhibited hysteresis of the market share when the price parameter is varied. This was due to the strong level of social influence in the hysteresis domain. Markus Brede talked on the synchronisation of Kuramoto oscillators with applications to social networks and opinion formation. The idea was to find the influence of the system configuration on the final state. Finally, Jeroen van den Burgh gave an overview of evolutionary modelling and environmental economics, provoking a variety of questions.

The afternoon consisted of a round table discussion where some of the emerging themes and ideas included the need for new metrics and indicators to measure economic dynamics, the need for simple models together with complementary narratives for use in explaining and analysing the behaviour of economic systems and the need for key questions and research challenges to determine how the field of complexity economics should progress.