Logic and Epistemology in Behavioral Economics

Abstract

Shu-Heng Chen was a deep student agent-based computational economics. He considered underlying issues arising with this approach including how it relates to experimental economics and behavioral economics. Herbert Simon founded behavioral economics and developed the concept of bounded rationality arising from the limits of knowledge of agents, the epistemological problem. He saw these as arising both from lack of knowledge but also from deeper computational problems arising from logical paradoxes associated with incompleteness theorems that imply non-computability of systems. Problems of knowledge also arise in such systems when they involve nonlinear dynamics leading to various forms of dynamic complexity involving chaos theory and fractal dimensionalities. This paper considers these issues in connection with the work of Chen.