Personalia
Cars Hommes, born in Vlagtwedde, the Netherlands, in 1960. Ph.D. from the University of Groningen. Professor of Economic Dynamics at the University of Amsterdam.
Distinguished Lorentz Fellow (1 September 2014 – 30 June 2015)
Socio-Economic Complexity
Research Question
How can complexity modelling tools that have been developed and successfully applied in the natural sciences be applied and explored in the socio-economic domain. How can complexity tools be employed to manage the emergent macro phenomena, such as herding, panics, bubbles, crashes and crises, in complex socio-economic systems?
Project Description
During his Distinguished Lorentz Fellowship Cars Hommes will investigate behavioral models of macroeconomics and finance. Socio-economic systems are influenced by people’s differing expectations and adaptive behaviour. In this project Professor Cars Hommes develops mathematical models of ‘boundedly rational’ behaviour and tests these models in laboratory experiments with paid human subjects. The need for new behavioral conceptual frameworks and improved predictive models of macroeconomic behavior has been expressed on several occasions by policy makers, especially in the wake of the recent financial crisis. The ultimate goal of a complex systems approach to economics is to develop more realistic models for managing extreme events and crises of socio-economic systems.
Selected Publications
1) Hommes, C.H. (2013), Behavioral Rationality and Heterogeneous Expectations in Complex Economic Systems, Cambridge University Press.
2) Hommes, C.H. (2013), Reflexivity, expectations feedback and almost self-fulfilling equilibria: economic theory, empirical evidence and laboratory experiments, Journal of Economic Methodology 20, 406-419, special issue on Reflexivity and Economics: George Soros’s Theory of Reflexivity and the Methodology of Economic Science.
3) Anufriev, M. & Hommes, C.H. (2012), Evolutionary selection of individual expectations and aggregate outcomes, American Economic Journal–Micro 4 (4), 35-64.