The Market Mind Hypothesis, page 1
Patrick Schotanus
The Market Mind Hypothesis
Patrick Schotanus
The Market Mind Hypothesis
Understanding Markets and Minds Through Cognitive Economics
ISBN 9783111211619
e-ISBN (PDF) 9783111215051
e-ISBN (EPUB) 9783111215617
Bibliographic information published by the Deutsche Nationalbibliothek
The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.dnb.de.
© 2023 Walter de Gruyter GmbH, Berlin/Boston
Übersicht
Table of Contents
Contents
Advance Praise for The Market Mind Hypothesis: Understanding Markets and Minds Through Cognitive Economics
Acknowledgements
Foreword
Prologue
Introduction: Opening a Can of Worms from Pandora’s Box
Background and Motivation: Mr Market and Me
Chapter 1 Setting the Stage: Who Am I? 1.1 Evolution of Minds and Markets; From Nature’s Jungle to the Economic One Freedom is the Volition to Exchange
1.2 Merging Minds and Markets: Group Minds, Collective Intentionality, and Intersubjectivity
1.3 Market Mind over Central Plan
Chapter 2 On Ontology: Am I Evil? 2.1 Economics’ Hard Problem
2.2 History of Mind Matters
2.3 The Mechanical Approach to Markets 1. Policymaking
2. Business
3. Investment
2.4 Market Mind Hypothesis; An Initial Proposition 2.4.1 The Market’s Mind
2.4.2 The Market’s Body
2.4.3 The Market’s Math and Modelling
2.5 Chapter Roundup
Chapter 3 On Theory: Am I Right? 3.1 Introduction
3.2 Coordination Dynamics
3.3 Extended Mind Theory
3.4 Predictive Processing Theory
3.5 Integrated Information Theory
3.6 Global Workspace Theory
3.7 Conclusion
Chapter 4 On Epistemology: Am I Lucky? 4.1 Epistemic Doubts 4.1.1 Introduction
4.1.2 Doubt about Cognitive Ability
4.1.3 Doubt about Model Realisation
4.1.4 Conclusion Epistemic Doubts
4.2 Is it Safe?
4.3 An Invisible Gorilla as (Another) Elephant in the Room
Chapter 5 On Methodology: Am I Healthy? 5.1 Introduction
5.2 Dependencies
5.3 Biases
5.4 Supermen
Chapter 6 On Complexity: Am I Emerging? 6.1 Understanding Complexity
6.2 The Case of Mind as Complex Adaptive System
6.3 Symbols
Intermezzo: Parallels Between Mind and Market. What is Mind? What is Market?
Chapter 7 On Discovery: Am I Free? 7.1 Introduction
7.2 Price as Numerical Influence
7.3 Price Discovery 7.3.1 Society’s Chain of Discovery
7.3.2 Distortions, Interferences, and Consequences
7.3.3 Price Discovery, Innovation and Productivity
7.4 The MMH as Price Theory
Chapter 8 On Portfolios: Am I Balanced? 8.1 Introduction
8.2 Emotions as Portfolios of Psychurities
8.3 Valuation of Emotion Portfolios 8.3.1 Quantitative Valuation
8.3.2 Qualitative Evaluation
8.4 Summary and Conclusion
Chapter 9 On Empiricals: Am I Verifiable? 9.1 Introduction
9.2 Spontaneous Volatility; Fooled by Reflexive Randomness 9.2.1 Introduction
9.2.2 Noise Trading
9.2.3 Readiness Potential
9.2.4 Parallels Between NT and RP
9.2.5 Findings from the Pilot Project
9.2.6 Discussion of Results
9.3 The Market Speaks its Mind 9.3.1 Introducing AVIR
9.3.2 Background and Motivation
9.3.3 AVIR
9.3.4 Methodology
9.3.5 Software Tools
9.3.6 Proposed Format Experiment
9.3.7 Extended Versions of Experiment
9.3.8 Summary, Conclusion, and Future Vision
Chapter 10 On the Hard Problem: Am I Conscious? 10.1 Addressing the Critics
10.2 Meeting Conditions of Collective Consciousness
10.3 In Sum: Investing = Dealing Together (With Our Hard Problem)
Chapter 11 On the Worst Case: Am I Breaking Down? 11.1 Introduction
11.2 Of Wetlands and Debtlands
11.3 Watersnoodramp: The Endgame
11.4 Painful Lessons
Chapter 12 On Closure: Farewell and Good Luck 12.1 Parting Words
Afterword: The Market Mind Hypothesis and 4E Cognitive Science: A Post-Cognitivist Approach to Cognitive Economics
Abbreviations and Glossary
Appendix 1Bridging Concepts and Terms Preparation
A. Cognitive Science A1. Cognition
A2. Metaphysics
A3. Mind
A4. Consciousness
A5. Other Minds
A6. Mood
A7. Artificial Intelligence
B. Economic Science B1. Investing
B2. Economics
B3. Finance
B4. Behavioural Economics and Evolutionary Rationality
B5. Economic system
C. Cognitive Economics C1. Introduction
C2. Metaphysics for Markets
C3. Portfolioism
C4. Price Discovery (Prequel)
C5. Market Mood
C6. Ownership
C7. Summary and Conclusion
Appendix 2Research Manifesto Research Motto
Research Hypothesis
Research Problem
Research Need
Research Backing
Research Data
Research Questions
Research Projects
References
About the Author
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Advance Praise for The Market Mind Hypothesis: Understanding Markets and Minds Through Cognitive Economics
Patrick Schotanus is a deep thinker and should be listened to.
Kiril Sokoloff
Founder and CEO 13D Research & Strategy
This book is a fascinating analysis of an area ignored in traditional economics: the interaction between the market and how people collectively learn and change their mind.
Mervyn King
Former Governor Bank of England
Author of The End of Alchemy and co-author of Radical Uncertainty
Do markets really have a mind? Do they have moods? What can this mean, and how might it impact the way we behave and manage risk? In this unique and compelling treatment, Patrick Schotanus weaves together theoretical economics and the science and philosophy of extended cognitive systems. Essential reading for anyone interested in markets - or minds!
Andy Clark FBA, FRSE
Professor of Cognitive Philosophy, University of Sussex
Author of Supersizing the Mind: Embodiment, Action, and Cognitive Extension,
and Surfing Uncertainty: Prediction, Action, and the Embodied Mind
This is a visionary book that sets the scene for a paradigm shift in economic thinking: namely, a shift from behavioural economics to cognitive economics. This move is motivated by an eclectic appeal to crosscutting themes in economics and cognitive (neuro) science. For example, the dialectic between brain and mind — and ensuing considerations of consciousness — and how this could frame a new way of thinking about the Market. Cognition and consciousness get into the game at two levels; namely, the fact that decisions and choices are made by conscious people, on the one hand. On the other hand, there is the intriguing notion of a collective consciousness that supervenes on individual decisions and transactions. This kind of collective (planning as) inference is now an important theme in many areas of neuroscience and ethology; for example, the notion of federated inference or distributed cognition and how it manifests in terms of (e.g., cultural) niche construction. This book offers a truly novel and compelling view of the Market — a view not only of how the Market works but a vision of how it could and should work in the future.
Karl Friston
Professor of Neuroscience, University College London
Co-author of Principles of Brain Dynamics
The research agenda suggested by this book provides a perspective to integrate the science of heuristics with economic theory. That is, to move from the bias-centered interpretation of behavioral economics to a more cognitive-oriented economics. For instance, agent-based models already assume that agents interact via adaptive rules, and this perspective can provide a formal basis for a revision of macroeconomic models that deal with heterogeneous behavior and uncertain environments. It is highly recommended reading.
Gerd Gigerenzer
Director of the Harding Center for Risk Literacy, University of Potsdam
Author of Gut Feelings and Reckoning With Risk
In this book, Patrick provides a deep and deeply challenging philosophical dive into the interaction of economics, markets and the human mind. The book is breathtakingly broad in the material and fields covered, a rarity in today’s world of micro-orientated specialization. It is this breath that provides the power of the central concept — the market mind hypothesis — which is essentially an emergent property of a complex adaptive system. I urge you to read this book, expand your understanding and let Patrick be your guide on a fascinating journey of discovery.
