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The Guidance of an Enterprise Economy$
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Martin Shubik and Eric Smith

Print publication date: 2016

Print ISBN-13: 9780262034630

Published to MIT Press Scholarship Online: May 2017

DOI: 10.7551/mitpress/9780262034630.001.0001

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Process, Strategy, and Behavior

Process, Strategy, and Behavior

(p.475) 12 Process, Strategy, and Behavior
The Guidance of an Enterprise Economy

Martin Shubik

Eric Smith

The MIT Press

The previous chapters have developed structure and provided proofs in principle as to how to build and analyse multistage models with simple assumptions about behavior. The hyper-astronomical explosion of special cases is to be welcomed as indicating that the initial timeless tight system, when converted to a loosely coupled process model, calls for both the specification of ad hoc questions and the supply of ad hoc model building of the detail needed to make it feasible to provide useful answers in any applications. We summarize the five dynamic models we analysed; but stress that in application there is no substitute for knowing both the relevant details and the behavioral considerations of the situation at hand. The dynamics of the steel industry requires details concerning both structure and behavior, as these are contrasted for example with selling high end art. In this chapter we examine the functioning of the double auction market and comment on trading mechanisms. Finally we discuss the relationship among solutions, structure and behaviour, closing with observations on dynamics and complexity and the false dichotomy between “Rational” or “Behavioral Agents”. For most individuals without deep psychological problems “context rationality” may provide a reasonable description.

Keywords:   Process, double auction, trading post, behavioral agent, clearing mechanisms

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