As the stock markets nosedive, the blame game between different groups continues. In an earlier entry, Kenneth Arrow’s point about the immense complexity of stock markets was highlighted. This complexity has been the subject of further investigations by complexity scientists and economists. The main problem pointed out is that traditional economic models rely too much on equilibrium theory but ignored many other aspects of decision theory and market mechanisms. Now scientists at U.S. Department of Energy’s Argonne National Laboratory are using agents based modeling to get a better insight into stock market: (more…)