Explaining Social and Economic Phenomena by Models with Low or Zero Cognition Agents

The standard socio-economic science model (SSSM) assumes very considerable cognitive powers on behalf of its individual agents. Agents are able both to gather a large amount of information and to process this efficiently so that they can carry out maximising behaviour. Criticisms of this approach are widespread, even within the discipline of economics itself. We set up agent based models in which agents have low or zero cognitive ability. We examine two quite diverse socio-economic phenomena, namely the distribution of the cumulative size of economic recessions in the United States and the distribution of the number of crimes carried out by individuals. We show that the key macro-phenomena of the two systems can be shown to emerge from the behaviour of these agents. In other words, both the distribution of economic recessions and the distribution of the number of crimes can be accounted for by models in which agents have low or zero cognitive ability. We suggest that the utility of these low cognition models is a consequence of social systems evolving the “institutions” (e.g., topology and protocols governing agent interaction) which provide robustness and evolvability in the face of wide variations in agent information resources and agent strategies and capabilities for information processing. The implication is that the degree of cognition which needs to be assigned to agents in socio-economic networks decreases as the system matures