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Dirk Helbing: Economics 2.0
Economics 2.0
(p. 109 – 150)

Dirk Helbing

Economics 2.0
The Natural Step towards a Self-Regulating, Participatory Market Society

PDF, 42 pages

Despite all our great advances in science, technology and financial innovations, many societies today are struggling with a financial, economic and public spending crisis, over-regulation, and mass unemployment, as well as lack of sustainability and innovation. Can we still rely on conventional economic thinking or do we need a new approach? Is our economic system undergoing a fundamental transformation? Are our theories still doing a good job with just a few exceptions, or do they work only for good weather but not for market storms? Can we fix existing theories by adapting them a bit, or do we need a fundamentally different approach? These are the kind of questions that will be addressed in this paper. I argue that, as the complexity of socio-economic systems increases, networked decision-making and bottom-up self-regulation will be more and more important features. It will be explained why, besides the homo economicus with strictly self-regarding preferences, natural selection has also created a homo socialis with other-regarding preferences. While the homo economicus optimizes the own prospects in separation, the decisions of the homo socialis are self-determined, but interconnected, a fact that may be characterized by the term networked minds. Notably, the homo socialis manages to earn higher payoffs than the homo economicus. I show that the homo economicus and the homo socialis imply a different kind of dynamics and distinct aggregate outcomes. Therefore, next to the traditional economics for the homo economicus (economics 1.0), a complementary theory must be developed for the homo socialis. This economic theory might be called economics 2.0 or socionomics. The names are justified, because the Web 2.0 is currently promoting a transition to a new market organization, which benefits from social media platforms and could be characterized as participatory market society. To thrive, the homo socialis requires suitable institutional settings such a particular kinds of reputation systems, which will be sketched in this paper. I also propose a new kind of money, so-called qualified money, which may overcome some of the problems of our current financial system. In summary, I discuss the economic literature from a new perspective and argue that this offers the basis for a different theoretical framework. This opens the door for a new economic thinking and a novel research field, which focuses on the effects, implications, and institutional requirements for global-scale network interactions and highly interdependent decisions.

  • history of science
  • two cultures
  • biology
  • sociology
  • game theory
  • algorithms
  • mathematics
  • simulation
  • urbanism
  • modeling
  • media technique
  • networks
  • swarm model

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