Complex Decision-Making in Economy and Finance

12Physics and Social Networks: Domain Similarities

12.1. Introducing a similarity of domains

The objective of this chapter is to establish a similarity link between the behavior we have in banking and in Nature. For that purpose, we will mention the social trouble France faced with the “Yellow Vests” phenomenon and the mode of governance in the country. More generally, this highlights a problem of adaptation, quite common with what exists in Nature.

Presently, the “behavioral economy” is a strong and dynamical trend in Economy. It was developed thanks to the contribution of Richard H. Thaler (2017 Nobel Prize): he focused on scientific studies related to cognitive bias that impacts the rationality of the homo œconomicus. Indeed, following the results of Amos Tversky and Daniel Kahneman (2002 Nobel Prize), these experts in psychology and behavioral economy focus on some deviances specific to conventional and rational approaches in economy.

Here, we focus on the fact that decision-making in economy is much more dependent on much more subtle agents and factors than the approaches based on excessive mathematization.

As stated by Adam Smith (The Wealth of Nations, published in 1776), the theory of “moral feelings”, in which any individual being appears as a more complex being than a simple rational agent, cannot be anymore ignored since we know that our mental pre-disposition is of key importance in any decision process.

Today, this explains why, when faced with “social networks”, ...