Jul 5, 2014

Classic article of the day

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From E. Ostrom's article "Beyond Markets and States: Polycentric Governance of Complex Economic Systems"
To explain the world of interactions and outcomes occurring at multiple levels, we also have to be willing to deal with complexity instead of rejecting it. Some mathematical models are very useful for explaining outcomes in particular settings. We should continue to use simple models where they capture enough of the core underlying structure and incentives that they usefully predict outcomes. When the world we are trying to explain and improve, however, is not well described by a simple model, we must continue to improve our frameworks and theories so as to be able to understand complexity and not simply reject it. p. 436

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