From left to rigth, Nelson Minar, JJ Merelo (one of my co-authors), Manor Askenazi and Chris Langton (founding father of Artificial Life) at the El Farol Bar, Santa Fe, New Mexico, during summer 1995. At the same year, Chris was the editor of the well-know Artificial Life book, by MIT Press, and JJ for the 3rd European Conference on Artificial Life, Granada, Spain.
In case you do not have a clue what the El Farol Bar meant to the Santa Fe Institute (SFI), have a read here to Brian Arthur‘s paper “Inductive Reasoning and Bounded Rationality: The El Farol bar problem“, American Economic Review, 84, 406-411, 1994 (or check previous posts). I am happy to say that I was also there, visiting Santa Fe back in 2000, speaking with, among other people with Cosma Shalizi, as well as having a cigar and a beer at the El Farol. Much probably at this table, which was near the front door window, one of my favourite ones during my two week stay.
Finally, and in what regards the ongoing present financial world crisis, here’s a quote from 1994’s Arthur’s paper:
[…] Economists have long been uneasy with the assumption of perfect, deductive rationality in decision contexts that are complicated and potentially ill-defined. The level at which humans can apply perfect rationality is surprisingly modest. Yet it has not been clear how to deal with imperfect or bounded rationality. From the reasoning given above, I believe that as humans in these contexts we use inductive reasoning: we induce a variety of working hypotheses, act upon the most credible, and replace hypotheses with new ones if they cease to work. Such reasoning can be modeled in a variety of ways. Usually this leads to a rich psychological world in which agents’ ideas or mental models compete for survival against other agents’ ideas or mental models–a world that is both evolutionary and complex. […]