W. Brian Arthur Quotes (16 quotes) | Quotes of famous people

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Famous W. Brian Arthur Quotes

“As we begin to understand complex systems, we begin to understand that we’re part of an ever-changing, interlocking, non-linear, kaleidoscopic world.”

W. Brian Arthur

W. Brian Arthur in: Mitchell M. Waldrop (2004) Complexity: The Emerging Science at the Edge of Order and Chaos http://books.google.nl/books?id=VP9TWZtVvq8C&pg=PA333. p. 333

“The type of rationality we assume in economics — perfect, logical, deductive rationality — is extremely useful in generating solutions to theoretical problems. But it demands much of human behavior — much more in fact than it can usually deliver. If we were to imagine the vast collection of decision problems economic agents might conceivably deal with as a sea or an ocean, with the easier problems on top and more complicated ones at increasing depth, then deductive rationality would describe human behavior accurately only within a few feet of the surface. For example, the game Tic-Tac-Toe is simple, and we can readily find a perfectly rational, minimax solution to it. But we do not find rational “solutions” at the depth of Checkers; and certainly not at the still modest depths of Chess and Go.”

W. Brian Arthur

Source: Inductive Reasoning and Bounded Rationality (The El Farol Problem) (1994), p. 1

“A technology that by chance gains an early lead in adoption may eventually 'corner the market' of potential adopters, with the other technologies becoming locked out.”

W. Brian Arthur

Source: Competing Technologies, Increasing Returns and Lock-in by Historical Events, (1989), p. 116

“Our understanding of how markets and businesses operate was passed down to us more than a century ago by a handful of European economists — Alfred Marshall in England and a few of his contemporaries on the continent. It is an understanding based squarely upon the assumption of diminishing returns: products or companies that get ahead in a market eventually run into limitations, so that a predictable equilibrium of prices and market shares is reached. The theory was roughly valid for the bulk-processing, smokestack economy of Marshall’s day. And it still thrives in today’s economics textbooks. But steadily and continuously in this century, Western economies have undergone a transformation from bulk - material manufacturing to design and use of technology — from processing of resources to processing of information, from application of raw energy to application of ideas. As this shift has occurred, the underlying mechanisms that determine economic behavior have shifted from ones of diminishing to ones of increasing returns.”

W. Brian Arthur

Arthur, W. Brian. "Increasing Returns and the New World of Business." Harvard business review 74.4 (1996): p. 100

“More than anything else technology creates our world. It creates our wealth, our economy, our very way of being.”

W. Brian Arthur

Source: The Nature of Technology: What It Is and How It Evolves. (2009), p. 10

“[Market outcomes] depends on the cumulation of random events.”

W. Brian Arthur

Source: Competing Technologies, Increasing Returns and Lock-in by Historical Events, (1989), p. 124; as cited in: Tobias Georg Meyer (2012) Path Dependence in Two-sided Markets. p. 244

W. Brian Arthur Quotes

“Complexity is looking at interacting elements and asking how they form patterns and how the patterns unfold. It’s important to point out that the patterns may never be finished. They’re open-ended. In standard science this hit some things that most scientists have a negative reaction to. Science doesn’t like perpetual novelty.”

W. Brian Arthur

"Coming from Your Inner Self", Conversation with W. Brian Arthur, Xerox PARC (16 April 1999) http://web.archive.org/web/20071011023150/http://www.dialogonleadership.org/Arthur-1999.html, by Joseph Jaworski, Gary Jusela, C. Otto Scharmer <br class="br">Context: Complexity theory is really a movement of the sciences. Standard sciences tend to see the world as mechanistic. That sort of science puts things under a finer and finer microscope. In biology the investigations go from classifying organisms to functions of organisms, then organs themselves, then cells, and then organelles, right down to protein and enzymes, metabolic pathways, and DNA. This is finer and finer reductionist thinking.<br>The movement that started complexity looks in the other direction. It’s asking, how do things assemble themselves? How do patterns emerge from these interacting elements? Complexity is looking at interacting elements and asking how they form patterns and how the patterns unfold. It’s important to point out that the patterns may never be finished. They’re open-ended. In standard science this hit some things that most scientists have a negative reaction to. Science doesn’t like perpetual novelty.

“Complexity theory is really a movement of the sciences.”

W. Brian Arthur

“Right after we published our first findings, we started getting letters from all over the country saying, "You know, all you guys have done is rediscover Austrian economics"… I admit I wasn't familiar with Hayek and von Mises at the time. But now that I've read them, I can see that this is essentially true.”

W. Brian Arthur

W. Brian Arthur, quoted in "Complex Questions" in Reason magazine (January 1996) http://reason.com/archives/1996/01/01/complex-questions/2, and in Hayek's Challenge : An Intellectual Biography of F. A. Hayek (2005) by Bruce Caldwell

“Increasing-returns economics has roots that go back 70 years or more, but its application to the economy as a whole is largely new.”

W. Brian Arthur

Source: Increasing Returns and Path Dependence in the Economy, (1994), p. 1: Chapter 1. Positive feedback in economics

“Our deepest hope as humans lies in technology; but our deepest trust lies in nature. These forces are like tectonic plates grinding inexorably into each other in one, long, slow collision.
This collision is not new, but more than anything else it is defining our era. Technology is steadily creating the dominant issues and upheavals of our time.”

W. Brian Arthur

Source: The Nature of Technology: What It Is and How It Evolves. (2009), p. 11

“Conventional economic theory is built is built on the assumption of diminishing returns. Economic actions engender a negative feedback that leads to a predictable equilibrium for prices and market shares. Such feedback tends to stabilize the economy because any major changes will be offset by the very reactions they generate. The high oil prices of the 1970s encouraged energy conservation and increased oil exploration, precipitating a predictable drop in prices by the early 1980s. According to conventional theory, the equilibrium marks the “best” outcome possible under the circumstances: the most efﬁcient use and allocation of resources.”

W. Brian Arthur

Source: Increasing Returns and Path Dependence in the Economy, (1994), p. 1: Chapter 1. Positive feedback in economics

“The inductive-reasoning system I have described above consists of a multitude of “elements” in the form of belief-models or hypotheses that adapt to the aggregate environment they jointly create. Thus it qualifies as an adaptive complex system. After some initial learning time, the hypotheses or mental models in use are mutually co-adapted. Thus we can think of a consistent set of mental models as a set of hypotheses that work well with each other under some criterion—that have a high degree of mutual adaptedness. Sometimes there is a unique such set, it corresponds to a standard rational expectations equilibrium, and beliefs gravitate into it. More often there is a high, possibly very high, multiplicity of such sets. In this case we might expect inductive reasoning systems in the economy—whether in stock-market speculating, in negotiating, in poker games, in oligopoly pricing, in positioning products in the market—to cycle through or temporarily lock into psychological patterns that may be non-recurrent, path-dependent, and increasingly complicated. The possibilities are rich.”

W. Brian Arthur

Source: Inductive Reasoning and Bounded Rationality (The El Farol Problem) (1994), p. 8

“Where we observe the predominance of one technology or one economic outcome over its competitors we should thus be cautious of any exercise that seeks the means by which the winner's innate 'superiority' came to be translated into adoption.”

W. Brian Arthur

Source: Competing Technologies, Increasing Returns and Lock-in by Historical Events, (1989), p. 127, as cited in: John Gowdy (1994) Coevolutionary Economics: The Economy, Society and the Environment. p. 148

“In many parts of the economy, stabilizing forces appear not to operate. Instead, positive feedback magniﬁes the effects of small economic shifts; the economic models that describe such effects differ vastly from the conventional ones. Diminishing returns imply a single equilibrium point for the economy, but positive feedback – increasing returns – makes for many possible equilibrium points. There is no guarantee that the particular economic outcome selected from among the many alternatives will be the “best” one.”

W. Brian Arthur

Source: Increasing Returns and Path Dependence in the Economy, (1994), p. 1: Chapter 1. Positive feedback in economics

“This paper has attempted to go beyond the usual static analysis of increasing-returns problems by examining the dynamical process that 'selects' an equilibrium from multiple candidates, by the interaction of economic forces and random 'historical events'. It shows how dynamically, increasing returns can cause the economy gradually to lock itself in to an outcome not necessarily superior to alternatives, not easily altered, and not entirely predictable in advance.”

W. Brian Arthur

p, 128
Competing Technologies, Increasing Returns and Lock-in by Historical Events, (1989)