ENS, meeting room Pavillon jardin, 29 rue d'Ulm, 75005 Paris
(with Thomas Graeber)
We propose a tractable theory of the complexity of economic decisions, and validate its main features experimentally. The primitives are the complexity of basic cognitive operations, such as simple mental algebra.The complexity of richer decision tasks is determined by their composition of basic operations. This gives rise to a precise formulation of the “complexity”of a problem that has a quite high domain of applicability.
We apply these notions to a few prototypical economic decisions,such as consumption over time, dealing with taxes, and a few games. We also present speculative remarks on a cognitive economy, with a worked-out analogy between the economy and the mind, and a proposal for how the importance of problems and subproblems could be encoded in the mind.