Review of Behavioral Economics > Vol 2 > Issue 1-2

A Comment on Gintis and Helbing “Homo Socialis: An Analytical Core for Sociological Theory”

Paul Ormerod, Centre for Decision Making Uncertainty, University College London and Volterra Partners LLP, London, UK, p.ormerod@ucl.ac.uk
 
Suggested Citation
Paul Ormerod (2015), "A Comment on Gintis and Helbing “Homo Socialis: An Analytical Core for Sociological Theory”", Review of Behavioral Economics: Vol. 2: No. 1-2, pp 175-182. http://dx.doi.org/10.1561/105.00000027

Publication Date: 29 Jul 2015
© 2015 P. Ormerod
 
Subjects
 
Keywords
A12D03D50D81Z13
Out of equilibriumNon-transitive preferencesRadical uncertainty
 

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In this article:
1. Introduction 
2. General Equilibrium 
3. Behavioural Rules Out of Equilibrium 
References 

Abstract

I consider first of all the usefulness of the concept of general equilibrium. Social and economic systems are dynamic, evolutionary processes, and for the most part, activity takes place in non-equilibrium situations. Most of my comments relate to behaviour out of equilibrium, which, Gintis and Helbing of course consider extensively. In essence, I make two key points. First, in general it is not reasonable to assume, as Gintis and Helbing do, that agents are able to construct probability distributions regarding future outcomes. This assumption ignores the role of radical uncertainty in the sense of Knight, Keynes, and, as I discuss, Alchian. Second, in general it is not reasonable to assume that agents’ preferences are transitive out of equilibrium. The two points are of course connected, but I separate them for discussion purposes. The assumption of transitive preferences is central to the Helbing-Gintis model, and is very far from being the ‘minimal’ assumption of the authors’ description of it. In general, the assumption of transitivity is not valid, which limits severely the applicability of the Gintis-Helbing structure.

DOI:10.1561/105.00000027