Markets as Complex Adaptive Systems
Lectures on CAS pioneered by Sheri Markose at the Centre for Computational Finance and Economic Agents since 2002 follows the perspective of Stephen Wolfram, Noam Chomsky, John Casti and Chris Langton. The sine qua non of CAS is its capacity to produce novelty and surprises, new objects that were previously not there. This framework that reflects ubiquitous phenomena such as the Liar/Contrarian, surprises and the arms race of innovation to escape from hostile agents- is outside the ambit of mathematical economics and game theory.
Sheri’s CAS lectures based on the formal mathematics of Gödel incompleteness uses the Emil Post proof (discussed by Raymond Smullyan in his book Formal Systems) shows the key components of CAS to be the following:
(i) Meta representational systems and self referential mapping capable by ‘ uber’ computational intelligence of a Universal Turing machine (recently identified with mirror neurons in the brain that can simulate scenarios with self in it)
(ii) Contrarian or self-negating structures like the Liar
(iii) The consequence of (i) and (ii) can be represented in so called creative and productive sets with the latter depicting an arms race in novelty production or ‘surprises’.
The 2017 Dynamics and Games AIMS paper, “Complex type 4 structure changing dynamics of digital agents: Nash equilibria of a game with arms race in innovations”, demonstrates that digital agents need to encode the Gödel sentence to implement novel objects outside listable sets:
Sheri M. Markose (2012). “Meta-representation, Mirroring and the Liar: Complex Strategic Behaviour and Arms Race in Novelty and Surprises”
Sheri completed several invited lectures in 2016 on complex adaptive systems given at different venues. These can be found here.