Our Human Behavior
In Chapter 4 we discussed revelations from the emergence of Complexity Economics as a new area of economic science. These insights help us understand how economies and economic transactions come to be. Within that discipline, there is some account of behavior that is inconsistent with the assumptions made in traditional economic models. But, the impact that emotions and cognitive biases can have on the decisions that agents make is more widely found in the sciences of Behavioral Finance and Behavioral Economics. Further, the way in which agents interact in complex systems also has a foundation in Game Theory.
In Chapter 5 we examined several key groups of people whose behavior can affect us. They are either part of the system that is our organization or belong to groups that interact with our organization. To varying degrees and in varying ways, they all have an interest in, and perception of, our success and how we might contribute to what they value. The people and groups we identified can, therefore, affect the value of our organizations today and in the future. They may decide to exchange something they have of value for what we offer, or not. They also influence others who are making similar decisions. Because of this potential impact on the value of what we do, we should want to better understand what drives their behavior.
It might make life simpler if people behaved in a manner that was consistent and rational, but, we know that some people ...