Complexity Economics

This chapter surveys experimental research on networks in economics.

Individuals derive benefits from their connections, but these may, at the same time, transmit external threats. Individuals therefore invest in security to protect themselves. However, the incentives to invest in security depend on their network exposures. We study the problem of designing a network that provides the right individual incentives.

The tension between efficiency and equilibrium is a central feature of economic systems. In many contexts, social networks mediate this trade-off: an individual’s network position determines equilibrium play, and social relations allow coordination on an efficient norm.

Anyone who has spent time in a developing country knows the importance of social connections. Among their many roles, these connections help individuals land jobs, and provide them with credit and other forms of support.

“You are now leaving the world as you know it.”

Ronald Coase, who passed away last week at age 102, spent his academic career swimming against the current.

what is economically correct must always be balanced with what is morally right.

Did the global economic collapse in 2008 stem from structural failures in the capitalist system?

“Four men sat at a table. Raised sixty floors above the city, they did not speak loudly as one speaks from a height in the freedom of air and space; they kept their voices low, as befitted a cellar.”

In the wake of the 2008 financial crisis, many of our policy makers and top economists are still stumbling in the dark.

In this paper we provide a summary and a guide to the literature for a new line of research which goes under the name of Economic Complexity and is partly performed incollaboration with INET.

What is the purpose of economics?

What happens when there’s no leader in the global economy?