The Financial Crisis and the Systemic Failure of Academic Economics

The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession’s focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.financial crisis; academic moral hazard; ethic responsibility of researchers

Rethinking Economics Using Complexity Theory

In this paper we argue that if we want to find a more satisfactory approach to tackling the major socio-economic problems we are facing, we need to thoroughly rethink the basic assumptions of macroeconomics and financial theory. Making minor modifications to the standard models to remove "imperfections" is not enough, the whole framework needs to be revisited. 1 Let us here enumerate some of the standard assumptions and postulates of economic theory. 1. An economy is an equilibrium system. In other words, it is a system in which all markets systematically clear at each point of time, but where the equilibrium may be perturbed, from time to time by exogenous shocks. 2. Selfish or greedy behaviour of individuals yields a result that is beneficial to society -a modern, widespread, but inaccurate reformulation of the principle of the "invisible hand". 3. Individuals and companies decide rationally. By this it is meant that individuals optimize under the constraints they are facing and that their choices satisfy some standard consistency axioms. 4. The behaviour of all the agents together can be treated as corresponding to that of an average or representative individual. 5. When the financial sector is analysed, it is assumed that financial markets are efficient. Efficiency here means that all the relevant information concerning an asset is reflected by the price of that asset. 6. For financial markets it is assumed that they function better if their liquidity is greater. 7. In financial markets, the more connected the network of individuals and institutions the more it reduces risks and the more stable and robust is the system. Below, we discuss the fundamental problems with these assumptions and outline some of the policy implications of improved assumptions. At a recent meeting at the OECD, the question arose as to whether the economy is currently just experiencing one of its recurrent shocks or whether it is experiencing a "phase change" ("systemic shift"). If the latter is correct, the discipline of economics may well need to undergo a paradigm change. Whilst earthquakes, floods and famines produce dramatic losses, it can be argued that the social and economic losses due to the current financial, economic and political crisis are even more severe. Millions of people now see that, what they considered to be a safe future, is endangered by lost savings and pensions and disruption of their normal lives. Besides this, crime, violence and political extremism may increase as well. In the worst-case scenario, further developments could seriously diminish our quality of life, our social capital (particularly trust and cooperativeness), and even our cultural values and achievements. The developments in the past 5 years have made it possible that single countries or even the European Union could become unstable over time, not only economically, but also socially. This worrying development calls for new recipes and concerted actions, and also for contingency plans. It is time to explore new ways of managing our economy, oriented at sustainability and resilience rather than only at the often destructive pursuit of competition, efficiency, and growth

Dendritic Cells Are Responsible for the Capacity of CpG Oligodeoxynucleotides to Act as an Adjuvant for Protective Vaccine Immunity Against Leishmania major in Mice

Vaccination with leishmanial Ag and CpG oligodeoxynucleotides (ODN) confers sustained cellular immunity and protection to infectious challenge up to 6 mo after immunization. To define the cellular mechanism by which CpG ODN mediate their adjuvant effects in vivo, the functional capacity of distinct dendritic cell (DC) subsets was assessed in the lymph nodes (LNs) of BALB/c mice, 36 h after immunization with the leishmanial antigen (LACK) and CpG ODN. After this immunization, there was a striking decrease in the frequency of the CD11c+B220+ plasmacytoid DCs with a proportionate increase in CD11c+CD8−B220− cells. CD11c+CD8+B220− cells were the most potent producers of interleukin (IL)-12 p70 and interferon (IFN)-γ, while plasmacytoid DCs were the only subset capable of secreting IFN-α. In terms of antigen presenting capacity, plasmacytoid DCs were far less efficient compared with the other DC subsets. To certify that DCs were responsible for effective vaccination, we isolated CD11c+ and CD11c− cells 36 h after immunization and used such cells to elicit protective immunity after adoptive transfer in naive, Leishmania major susceptible BALB/c mice. CD11c+ cells but not 10-fold higher numbers of CD11c− cells from such immunized mice mediated protection. Therefore, the combination of LACK antigen and CpG ODN adjuvant leads to the presence of CD11c+ DCs in the draining LN that are capable of vaccinating naive mice in the absence of further antigen or adjuvant

Uncertainty, Decision Science, and Policy Making: A Manifesto for a Research Agenda

The financial crisis of 2008 was unforeseen partly because the academic theories that underpin policy making do not sufficiently account for uncertainty and complexity or learned and evolved human capabilities for managing them. Mainstream theories of decision making tend to be strongly normative and based on wishfully unrealistic “idealized” modeling. In order to develop theories of actual decision making under uncertainty, we need new methodologies that account for how human (sentient) actors often manage uncertain situations “well enough.” Some possibly helpful methodologies, drawing on digital science, focus on the role of emotions in determining people’s choices; others examine how people construct narratives that enable them to act; still others combine qualitative with quantitative data

DAX: Data-Driven Audience Experiences in Esports

Esports(competitivevideogames)havegrownintoaglobalphenomenon with over 450m viewers and a 1.5bn USD market. Esports broadcasts follow a similar structure to traditional sports. However, due to their virtual nature, a large and detailed amount data is available about in-game actions not currently accessible in traditional sport. This provides an opportunity to incorporate novel insights about complex aspects of gameplay into the audience experience – enabling more in-depth coverage for experienced viewers, and increased accessibility for newcomers. Previous research has only explored a limited range of ways data could be incorporated into esports viewing (e.g. data visualizations post-match) and only a few studies have investigated how the presentation of statistics impacts spectators’ experiences and viewing behaviors. We present Weavr, a companion app that allows audiences to consume datadriven insights during and around esports broadcasts. We report on deployments at two major tournaments, that provide ecologically valid findings about how the app’s features were experienced by audiences and their impact on viewing behavior. We discuss implications for the design of second-screen apps for live esports events, and for traditional sports as similar data becomes available for them via improved tracking technologies

The Future of Agent-Based Modeling

In this paper, I elaborate on the role of agent-based (AB) modeling for macroeconomic research. My main tenet is that the full potential of the AB approach has not been realized yet. This potential lies in the modular nature of the models, which is bought by abandoning the straitjacket of rational expectations and embracing an evolutionary perspective. I envisage the foundation of a Modular Macroeconomic Science, where new models with heterogeneous interacting agents, endowed with partial information and limited computational ability, can be created by recombining and extending existing models in a unified computational framework

Metagaming and metagames in Esports

The metagame is a convoluted term with no unified definition despite its importance and its common occurrence across different fields such as game design and behavioural economics. In our paper we provide a unified and compact definition of the term metagame and metagaming by firstly highlighting their historical evolution. Although, the metagame meant multiple things such as the environment surrounding the game, it has come to mean a perceived optimal or dominant playing strategy that is usually popular with an esport at that specific point in time. "Metagaming" as a verb is distinct and refers to a number of ways a player can affect the outcome of a game that are external to the game’s environment. We focus on how these terms crystallised in the world of digital entertainment (esports) by providing multiple examples of metagames and metagaming in competitive settings. Finally, we provide a theoretical framework on the life cycles of metagames as well general guidelines of understanding the current metagame of LoL and Dota 2. We conclude that by understanding and cataloguing the highly fluctuating metagame(s) of an esport at specific points in time, researchers will gain a historical context of that game’s space which in turn will give them insight into the decision making of professional esports players along with a possible future understanding of how the game will progress